The European Union has decided to suspend retaliatory tariffs on U.S. goods that were set to take effect Monday, in a bid to reach a trade agreement with the Trump administration by the end of the month.

“This is now the time for negotiations,” European Commission President Ursula von der Leyen told reporters in Brussels on Sunday, following a letter from President Donald Trump announcing new U.S. tariffs of 30% on goods from the EU and Mexico, effective August 1.

The EU, the United States’ largest trading partner and the world’s biggest trading bloc, had planned to implement “countermeasures” starting Monday at midnight Brussels time (6 p.m. EDT). Trade negotiations on behalf of the EU’s 27 member states are handled by the European Commission.

Von der Leyen said the EU would delay implementing those measures until August 1, noting that Trump's letter “shows that we have until the first of August” to strike a deal. European leaders have been urging both sides to allow more time for negotiations.

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“We have always been clear that we prefer a negotiated solution,” she said. “If no deal is reached, we will continue to prepare countermeasures so we are fully prepared.”

Speaking alongside Indonesian President Prabowo Subianto, von der Leyen also emphasized the need to diversify the EU’s trade relationships, citing ongoing tensions with the U.S.

Trump has argued that global tariffs are essential to address a U.S. trade deficit he considers a national security threat. The EU-U.S. trade relationship was valued at €1.7 trillion ($2 trillion) in 2024, according to Eurostat, with major European exports including pharmaceuticals, cars, aircraft, chemicals, medical instruments, and wine and spirits.

EU trade ministers are set to meet Monday to review trade ties with the U.S. and China.