US President Donald Trump and European Commission President Jean-Claude Juncker have struck a deal to suspend new tariffs as the ongoing negotiation over trade continues, clawing Europe and the US back from the verge of an all-out transatlantic trade war.
The two leaders promised to expand European imports of US liquefied natural gas and soybeans. They also agreed to lower industrial tariffs, but not including auto tariffs. The United States and the European Union agreed to “hold off on other tariffs” as the negotiations continue to roll out.
They will also reexamine US steel and aluminum tariffs and retaliatory duties slapped by the EU “in due course,” according to Juncker.
“We had a big day, very big,” Trump said during a press conference with Juncker at the White House on Wednesday. “We are starting the negotiation right now, but we know where it is going.”
Trump then hailed a “new phase” of trade relations.
The deal eases tensions fueled by Trump’s warning of imposing new tariffs on automobile imports. Meanwhile, US stocks and bond yields perked up due to optimism that a US-EU trade war could still be sidestepped.
Trump also said that they would try to “resolve” steel and aluminum tariffs that he has imposed earlier this years, as well as the EU retaliatory duties. The US and EU will work together in order to reform the World Trade Organization, Trump added.
The two world leaders did not take any questions after their brief appearance and remarks in the Rose Garden. Their appearance was scheduled after nearly three hours of talks.
Senator Rob Portman, who is an Ohio Republican, stated that he applauded the move to squash tensions over tariffs.
“I’m glad. I think it’s going to help defuse some of the concern over there, not only in the farm country but in our economy generally,” said Portman. “It’s a first step. We’ve still got to work out the details. But it’s been hard these last few weeks to see any light at the end of the tunnel,” without seeing any signs from the EU, Mexico, Canada, or China.
The truce may be short-lived if the two sides fail to resolve their difference over trade in vehicles and car parts. Last May, Trump ditched a framework for trade negotiations with China just days after the announcement. After that, Trump ratcheted up tariffs.
“They sold it as something very positive, but for me the announcement is not as big for now, because it’s kind of a semi-truce,” said Marie Kasperek, who is the associate director of the global business and economics program at the Atlantic Council. “As long as the steel and aluminum tariffs are ongoing, the EU will not negotiate on a high-level basis.”
According to Trump, a 10-percent tax on imports of cars to the EU is too high when compared to the 2.5 percent rate charged by the United States. The US president has also been critical of the EU over its $150 billion trade surplus with the US.