The EU has increased its pressure on the US to reconsider the "Buy American" clause in the $800bn (£567bn) economic recovery package now before Congress.
The clause seeks to ensure that only US iron, steel and manufactured goods are used in projects funded by the bill.
A European Commission spokesman said it was the "worst possible signal".
However, German Chancellor Angela Merkel said President Obama had assured her the US would not follow protectionist policies.
"He stressed that," she said.
The rescue plan has already been approved by the US House of Representatives and is under discussion in the Senate this week, who could sign it off before the weekend.
The EU spokesman said Europe would launch a complaint with the World Trade Organization (WTO) if the clause remained.