The EU says it will act “decisively” if the US goes ahead with a threat to put new tariffs on its goods.
It is latest twist in a long-running row with Washington over subsidies granted to the planemaker Airbus.
For more than a decade, the EU and US have accused each other of propping up their home aviation markets with tax breaks, research grants and other aid.
Last month, the US threatened duties on EU goods such as beer, gin and olives, escalating the row.
On Monday, Europe’s trade commissioner Phil Hogan said Washington had rejected moves to settle the dispute.
“I want to reassure people that we are ready to act decisively and strongly on the European Union side if we don’t get the type of outcome that we expect from the United States in relationship to finalising this 15-year-old dispute,” he told the European Parliament’s trade committee.