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In an effort to avert a potential trade war, EU chief Ursula von der Leyen said Sunday that Brussels will hold off on retaliating against existing US tariffs on steel and aluminum imports, as it seeks a deal to avoid broader 30% tariffs. Her statement comes in the wake of President Donald Trump's threat on Saturday to impose sweeping tariffs on the 27-nation bloc if no agreement is reached by August 1.
"The United States has sent us a letter with measures that would come into effect unless there is a negotiated solution, so we will therefore also extend the suspension of our countermeasures until early August," von der Leyen told reporters.
"At the same time, we will continue to prepare for the countermeasures so we're fully prepared," she added.
The European Commission president insisted that the European Union has "always been very clear that we prefer a negotiated solution. This remains the case, and we will use the time that we have now till August 1".
The move by von der Leyen will spur hope that Trump's latest threat -- in which he also targeted Mexico -- has not killed off the progress made in negotiations so far between Brussels and Washington.
The European Union's current suspension of its retaliation over US steel and aluminium tariffs had been set to expire overnight Monday to Tuesday. Brussels has readied duties on US goods worth around 21 billion euros ($24 billion) in response to the levies Trump slapped on metal imports earlier this year.
But it announced in April it was holding off on those measures to give space to find a broader trade agreement with the Trump administration. "Since the very beginning, we have worked and now are ready to respond with countermeasures. We've prepared for this, and we can respond with countermeasures if necessary," von der Leyen said.
Germany's finance minister Lars Klingbeil said on Sunday that "serious and solution-oriented negotiations" with the United States were still necessary, but added that if they fail, the European Union would need "decisive countermeasures to protect jobs and businesses in Europe".
EU trade ministers are set to meet Monday in Brussels to discuss the bloc's response to Trump's latest move -- and crucially how strong a line to take with Washington.
