I think there are at least two obvious reasons,
EU profits from trade with Russia. Russia buys a lot of stuff, sells a lot of stuff EU needs, and also uses European market for its transactions with other parties, increasing its size and importance. A lot of European companies has fat local branches in Russia, such as banks, retailers, consumer goods makers, etc - whose bottom line will not be happy.
EU can't afford to fire all of their weapons and come empty-handed. Let's assume EU introduces a full ban on trade with Russia. Let's assume Russia takes over Belarus and Ukraine the next morning and blockades the Baltic states. EU can't do anything short of military invasion at this point since it has exhausted its "soft" options.
There are subtle reasons, such as, some countries in EU may not be happy about the policies of EU and/or USA and so they would give the necessary lip service and then block the harsh measures because they feel that Russia balances out these parties.
Update: Losing half of the international trade is not a deterrent to stop Putin from trying to rebuild Russia sphere of influence. The threats of loss of half of the international trade are a deterrent. Once you actually trigger it, the damage is done but it's not a deterrent anymore since there's no downside for Putin to invade whoever he pleases after already suffering the "pre-consequences".