The European Union will keep all options on the table in terms of its response to Britain's move to override some post-Brexit rules for Northern Ireland, Maros Sefcovic said on Thursday, when asked about the possibility of a trade war.
The EU launched new legal proceedings against Britain on Wednesday after London published its new legislation, with both moves expected to take over a year to come into force.
The EU could eventually review terms of the free trade deal it agreed with Britain. It has already thrown doubt on its role within the €99 billion Horizon Europe research programme.
"We have to keep all options on the table," Sefcovic, the European Commission Vice President who oversees EU relations with Britain, told Sky News.
He said the two sides needed to continue talking to hammer out a solution to improve trade friction on goods moving between Britain and Northern Ireland, and that a unilateral approach by London would only sow uncertainty.
London has proposed scrapping some checks on goods from Britain arriving in the region and challenged the role of the European Court of Justice to decide on parts of the post-Brexit arrangement agreed by the EU and UK.
Sefcovic has said the move is illegal.
Northern Ireland is in the EU single market for goods, meaning imports from the rest of the United Kingdom are subject to customs declarations and some checks on their arrival.
The arrangement was set to avoid reinstating border controls between the North and the Republic, which are seen as contravening the spirit of the 1998 Good Friday/Belfast Agreement.