EU pauses tariff response to US, Indonesia trade breakthrough announced

BRUSSELS – European Commission President Ursula von der Leyen announced on Sunday afternoon that the EU would extend the suspension of retaliation against the US until early August. She also unveiled a political agreement for a trade deal with Indonesia.

"We will use the time that we have until the 1st of August," said von der Leyen at a press conference in Brussels alongside Indonesian President Prabowo Subianto.

The bloc will keep working on countermeasures to the 30% tariffs announced by the US, which will start 1 August. But Brussels is "not there yet" and will continue negotiations as the end of the month approaches.

EU ambassadors were called to discuss the response to Donald Trump's tariff escalation on Sunday at 15:30, as the suspension of an initial package of retaliatory measures is set to expire on Monday. But von der Leyen’s comments confirm the pause will be extended.

Brussels has repeatedly delayed retaliatory action in hopes of reaching a negotiated solution – despite the EU already facing a blanket 10% tariff since April, alongside duties of 50% on steel and aluminium and 25% on cars and car parts.

Several diplomatic sources consulted by Euractiv on Sunday suggested that most member countries support the Commission's stance and will not push for retaliation before the 1 August deadline.

Indonesia trade progress

During the same press conference, von der Leyen said a "political agreement" had been reached on Sunday to advance towards an "ambitious" free trade deal with Indonesia. This follows ten years of negotiations.

Acknowledging the growing geopolitical volatility and economic uncertainty, von der Leyen emphasised the need for partners to "come closer together". The agreement "comes at the right time," she added.

Under her second mandate, von der Leyen has been pushing to diversify trade ties and seal ambitious agreements this year with partners including Indonesia, India, and Malaysia, as well as ratifying the finalised deals with Mercosur and Mexico.

Indonesia's President Prabowo Subianto, who repeatedly apologised for visiting Brussels "on a Sunday", described the move as a breakthrough. "We would like to see more European presence and more European participation in our economy," he added, stressing that the EU is seen as "a leader" and a key actor in providing global stability.

"Many of us wouldn't like to admit it openly (...) but I am here and I admit it: I would like to see a stronger Europe," said Prawobo.