President Donald Trump left the World Economic Forum on Wednesday with a potentially new trade war brewing.

Trump is at odds with European partners over taxing some of Silicon Valley's biggest companies.

Even Britain, Trump's closest European ally, risks falling out with the U.S. over the issue.

Sitting close to U.S. Treasury Secretary Steven Mnuchin at a discussion panel in Davos, Switzerland, British Finance Minister Sajid Javid said: "We plan to go ahead with our digital services tax in April," and argued for its legitimacy: "…it is a proportionate tax and it is a tax that is deliberately designed as a temporary tax."

But for Mnuchin, taxing U.S. tech titans such as Amazon, Google and Facebook could trigger retaliation.

"If people want to just arbitrarily put taxes on our digital companies, we'll consider arbitrarily putting taxes on car companies," he retorted.

The Trump administration has made a similar threat to European Union member states - tariffs potentially as high as 25 percent on vehicles imported into the U.S. and up to 100% on luxury goods such as champagne.

At least the U.S. has found an accommodation with France, among the most vocal critics of Silicon Valley companies with a history of paying little to no tax in Europe.

"There is now a joint global framework between France and the United States on this digital tax," French Finance Minister Bruno Le Maire told reporters at Davos. "France is ready to postpone the payment of its digital tax installments to December 2020."

Trump suggested the threat of fresh tariffs would coerce the EU into a trade deal and level what the U.S considers an unfair playing field. "They have to do that," Trump told a news conference before leaving Davos."Look, I'm not saying it from strength or from weakness," he added, "I'm just saying they have to do it."

That will be put to the test when the U.S. and EU next meet for trade talks.