The European Union should prepare for its companies to be targeted by US sanctions in a worsening trade dispute between the United States and China, former World Trade Organisation (WTO) director general Pascal Lamy said.

“If the U.S. were to step further in not only hitting China with trade measures but with sanctions, if they were to deal with China the way they did with Iran, then we would all have a big problem,” Lamy said. “That’s why we need to have a careful look at what will happen in the case of Iran,” he added.