Brussels has threatened to suspend two data sharing agreements with the US, in an escalation of transatlantic tensions over claims that America's intelligence agencies have been spying on European citizens and embassies.
The move comes despite an attempt by the Obama administration to defuse the row over U.S. surveillance activities, which threatens to overshadow the start of talks on a EU-U.S. trade deal next week.
In a letter to U.S. senior officials, Cecilia Malmström, the EU's home affairs commissioner, said unless the U.S. could demonstrate that it was respecting bloc data security laws it would be forced to halt a deal that gives U.S. authorities access to Europeans' financial transaction data and airline passenger information.
"We are experiencing a delicate moment in our relations with the US, our strongest ally. Mutual trust and confidence have been seriously eroded and I expect the U.S. to do all that it can to restore them," she wrote in a letter addressed to Janet Napolitano, secretary of Homeland Security, and David Cohen, undersecretary of Treasury.
"Should you fail to demonstrate the benefits of the terrorist financing tracking program and passenger name record instruments for our citizens and the fact that they have been implemented in full compliance with the law . . . I will be obliged to reconsider if the conditions for their implementation are still met," she added.