The EU has postponed trade talks with Australia due to the fallout from the submarine deal.

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Australia’s Trade Minister, Dan Tehan, said on Friday that trade talks with the European Union have been postponed, as a row over Canberra’s decision to cancel a $40 billion deal with France escalates.

Australia cancelled a contract with France’s Naval Group to build a fleet of conventional submarines last month, instead opting to build at least eight nuclear-powered submarines using US and British technology, following the formation of a trilateral security partnership with those two countries.

France was enraged by the cancellation, accusing both Australia and the United States of stabbing it in the back.

Paris recalled its ambassadors from both Canberra and Washington.

In solidarity with France, European Commission president Ursula von der Leyen has questioned whether the bloc could strike a trade deal with Australia.

Tehan on Friday declined to comment on the role the submarine deal had played in delaying negotiations but confirmed the 12th round of talks scheduled for Oct 12 had been postponed by a month.

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“I will meet with my EU counterpart Valdis Dombrovskis next week to discuss the 12th negotiating round, which will now take place in November rather than October,” Tehan said in a statement to Reuters.

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