U.S. President Donald Trump on Tuesday announced a trade deal with Indonesia, the latest pact in a bid to cement better terms with trading partners and reduce a massive trade deficit, even as the European Union readied retaliatory measures should talks between Washington and its top trading partner fail.

The European Union has warned that its trade with the United States could be effectively wiped out if Washington makes good on its threat to slap a 30% tariff on goods imported from the bloc.

Italy's foreign minister warned that, while he hopes for successful negotiations, the EU will respond resolutely to Trump's latest tariff threat.