The EU launched a list of US goods from bubble gum to parts for nuclear reactors that it could hit with $4.0 billion of punitive duties in a row with Washington over illegal export tax breaks.
The European Union insisted its aim was to keep pressure on Washington to scrap the scheme that sparked the dispute and said it would try to avoid harming European industry, still recovering from an economic downturn.
The United States said sanctions were a double-edged sword and insisted it would try to comply with global trade rules.
The European Commission said there was no deadline for the sanctions to come into play, but was closely watching US efforts to end its tax breaks scheme.
"It is important to follow the progress of work. When we see that there is no work in progress we would have to take a decision on imposing sanctions," said Arancha Gonzalez, the spokeswoman for EU Trade Commissioner Pascal Lamy.
Lamy has led a tough policy against the United States, also threatening sanctions in a fight with Washington over steel duties imposed by President George W. Bush in March.
Despite sometimes fierce rhetoric, the trade giants want to avoid worsening ties already hit by a row over steel tariffs and as they lead talks to liberalise world trade. The talks, launched at Doha in Qatar last year, are due to end in 2005.
US Trade Representative Robert Zoellick has likened launching the sanctions to "using a nuclear weapon" against the world trade system. His spokesman, Rich Mills, cautioned the EU over the use of sanctions on Friday.
"We believe that making this list public and seeking input from European stakeholders will help focus European attention on the implication of retaliation. This is truly a doubled-edged sword," he said in Washington.
He repeated that the United States intends to avoid retaliation by changing its tax law in line with WTO rules, but could not say if that would be this year.
The EU won the right to impose the duties after the World Trade Organisation (WTO) ruled that the US scheme, called the Foreign Sales Corp, was illegal under trade rules.
The EU published its list in its Official Journal on the internet with hundreds of products including agricultural goods such as wheat gluten, nuts, vegetables, buckwheat and millet. The list is at www.europa.eu.int/eur-lex/en/oj/index-list.html.
Other products on the list included raw cane sugar, gum and jelly confectionery, boiled sweets, chewing gum, dairy products, meat, oil seeds and various animal and vegetable oils.
It has also had television sets, sunseeds and linseed oil, copper and aluminium and toy puzzles.
The goods are worth around $14 billion, but this will be whittled down once EU industry has lobbied to get products it needs and does not want hit by duties dropped from the hit list.
The Commission said it had aimed for US goods which EU producers find elsewhere as they were at most 20 per cent of imports to the EU in each field.
US legislators have said they are making progress in getting the offending legislation changed, but have expressed doubts it will happen this year.
One bill has run into opposition from Boeing and others who gained from the export tax break. They say the new law does too little to help them and warned of job cuts.
Senate Finance Committee chief Max Baucus, a Montana Democrat, has urged the administration to lead the crafting of a bill by forming a congressional-executive branch working group.
EU industry groups have until November 12 to respond to the EU's list, but some are already worried heavier duties on some imports will lead to their own business suffering.