Business leaders have warned against US isolationism and trade protectionism.

As the government warned that the EU stands poised for a trade war with America, CBI president Sir John Egan said that British business is "deeply concerned" about the approach of the Bush government.

"No government should avoid playing its part in removing trade barriers that destroy wealth," he told the CBI's annual conference.

His comments echo those of the trade secretary Patricia Hewitt, who this weekend urged the US to remove trade barriers.

"The time has quite clearly come for President Bush to say 'we've done those tariffs, we don't need them any longer, they are unlawful' - even if the Americans didn`t initially accept that," she told the BBC Politics Show.

"It is time for them to go because if they don't go by the first week in December we will be into a trade war with European retaliations against American imports.

"We don't want that - we don't want that for our consumers, the Americans don`t want it for their business."

The CBI has debated world trade and the "special relationship" and also heard a speech by Tony Blair.

The CBI hailed the anglo-US trading relationship but warned that it could be jeapordised by protectionist measures

"Let me start by making one thing absolutely clear: British business hugely values its relationship with the US," said Sir John.

"The US is the engine room of the global economy, now growing at an annualised rate of 7.2 per cent in the third quarter this year - compare that with therecessionary climate of France, Germany or Japan.

"In addition, the UK is by far the top world destination for US foreign investment and over 40 per cent of UK foreign investment goes into the US."

But he urged the prime minister to raise the difficult issue of trade barriers when he holds talks with President Bush this week.

"We want the prime minister to make the most of the relationship between these two great trading nations. We support this week's state visit and want it to be a success," he said.

"That does not mean we should not press home our concerns. And we are deeply concerned, not as some say that America is trying to dominate theworld but rather that it is not interested enough.

"There is a real danger of the country sliding towards isolationism and protectionism.

"The rest of the world desperately needs America to stay engaged. President Bush has an opportunity to show leadership and send a signal to the world about America's intentions."

Sir John went on to admit that the US has legitimate concerns.

But he pressed the administration to remove illegal barriers to trade.

"I know Americans have worries that the US recovery - strong though it is - is not creating enough jobs. I know there are fears about competition for investment from countries such as China," he said.

"But I reject the fixes some US politicians espouse such as putting up tariffs and discriminating between domestic and foreign firms. In the long run, theywill damage the US economy and damage the nation's global reputation."

The CBI also attacked the US administration's approach to issues such as steel tariffs, farm subsidies, the Kyoto environmental targets and the so-called "Buy America" regime.

"The US government's stance on steel tariffs is not only illegal it is damaging business on both sides of the Atlantic. The tariffs may have saved a few steeljobs in Ohio but they have destroyed car worker jobs in Detroit," Sir John added.

"I urge the President to abandon the tariffs as soon as possible. It is business everywhere that pays the price when politicians engage in trade wars."