The EU's ambassador to the US has suggested a new deal to alleviate the ongoing transatlantic trade war that would see both parties agree to remove tariffs on certain goods.

Stavros Lambrinidis said that if president Joe Biden lifts tariffs on imports of European steel and aluminum products, the EU is ready to immediately reciprocate by removing duties on US goods imported to the bloc.

Currently, EU imports of steel to the US are subject to tariffs of 25 per cent, while aluminum imports attract levies of ten per cent under measures put in place by Donald Trump's administration.

Mr Lambrinidis said in a virtual call hosted by the US Chamber of Commerce that if these tariffs are removed, the EU is prepared to lift countermeasures that amount to as much as 25 per cent on about €2.8 billion euros ($3.4 billion) of imports.

This could affect up to 200 categories of US products, including Harley-Davidson motorcycles, Levi Strauss jeans and bourbon whiskey.

"We want to deal with trade disputes with the US quickly, effectively and now," he said.

The ambassador added that the EU has proposed freezing tariffs imposed as a result of the row over subsidies for Airbus and Boeing aircraft for six months, to give negotiators time to work on resolving the dispute, Euractiv reports.

He also warned that if the situation does not come to a satisfactory conclusion soon, both planemakers could lose out to emerging competition.

"China … today (is) building 100 per cent subsidized aircraft that could flood the market in a few years' time, and that is a real danger, a real strategic danger," Mr Lambrinidis said.