'I would rather have preferred Britain not to have chose to leave the European Union, but anyone who leaves the European Union has to know, frankly, what this means, ' he said.
If Britain stays in a form of a customs union it would reduce the costs for both sides by about half, the report said.
The European Commission is expecting to hear from the United States in the coming days how the European Union can avoid USA import tariffs on steel and aluminum, Commission President Jean-Claude Juncker said on Tuesday.
"At this stage, there should be much clearer ideas on the table about how things will continue after Brexit", he said."The time pressure is enormous". Britain is due to leave the European Union on March 29, 2019 but is looking to agree a transition agreement for a period after Brexit in order to smooth out the impact.
And the former Luxembourg PM warned London the European Union institutions and member states stood squarely in support of Ireland on the issue.
The European Union wants the U.K.to promise to act "in full mutual respect and good faith", according to the first revision of the bloc's draft Brexit treaty.
"If you decide to jettison, leave behind, the common agreements and rules, then you have to accept that things can not remain as they are", Juncker added.
"Do they also want to distance themselves from our regulatory model, the one that we have constructed together with you - and you with us - for 44 years?"
With the United Kingdom scheduled to leave the bloc in a year's time and much still to negotiate, Nigel Farage, a member of the European Parliament and one of Brexit's most vocal champions, urged May to stand up to the "unelected bullies" of the EU and revelled in the U.S. threat of punitive trade tariffs.
The European Parliament's Brexit co-ordinator Guy Verhofstadt also called for more details from Ms May.
He said: 'There was this Mansion House speech by Mrs May, but it was mainly repeating the red lines that we know already'.
Discussions around the financial services sector post-Brexit are expected to be held during the European Council meeting on 22-23 March. "We see this with Brexit, we see this with trade, we see this across the board".