WASHINGTON (AP) President Donald Trump and European leaders pulled back from the brink of a trade war over autos Wednesday and agreed to open talks to tear down trade barriers between the United States and the European Union.
But while politicians and businesses welcomed the deal Thursday, the agreement was vague, the negotiations are sure to be contentious, and the United States remains embroiled in major trade disputes with China and other countries.
In a hastily called Rose Garden appearance with Trump, European Commission President Jean-Claude Juncker said the U.S. and the EU had agreed to hold off on new tariffs, suggesting that the United States will suspend plans to start taxing European auto imports a move that would have marked a major escalation in trade tensions between the allies.
Trump also said the EU had agreed to buy a lot of soybeans and increase its imports of liquefied natural gas from the U.S. And the two agreed to resolve a dispute over U.S. tariffs on steel and aluminum.
Treasury Secretary Steven Mnuchin said Thursday addressing steel and aluminum tariffs and counter tariffs would be covered in the first phase of talks between the U.S. and the EU. He reiterated that no new tariffs would be imposed during the negotiations and if the US concluded an agreement, there would be no car tariffs on the EU.
Trump was traveling to Iowa and Illinois today in which his trade agenda was expected to be a leading issue. The administration recently announced a $12 billion temporary aid package for farmers including soybean producers dealing with the impact of retaliatory tariffs.
Its encouraging that theyre talking about freer trade rather than trade barriers and an escalating tariff war, said Rufus Yerxa, president of the National Foreign Trade Council and a former U.S. trade official. But he said reaching a detailed trade agreement with the EU would likely prove difficult.
The tone was friendlier than it has been. During a recent European trip, Trump referred to the EU as a foe, what they do to us in trade. The EUs Juncker said in March, after Trump imposed tariffs on steel and aluminum imports, that this is basically a stupid process, the fact that we have to do this. But we have to do it. We can also do stupid.
On Wednesday, Trump and Juncker said they have agreed to work toward zero tariffs and zero subsidies on nonautomotive goods.
Trump told reporters it was a very big day for free and fair trade and later tweeted a photo of himself and Juncker in an embrace, with Juncker kissing his cheek.
Obviously the European Union, as represented by @JunckerEU and the United States, as represented by yours truly, love each other! he wrote.
The agreement was welcomed by political and business leaders in Germany, the EUs biggest economy, though their relief was tempered with caution that details have to be firmed up.
Very demanding and intensive negotiations lie ahead of us, German Economy Minister Peter Altmaier said, vowing that we will represent and defend our European interests just as emphatically as the U.S. does with its interests. He said the Trump-Juncker accord was a good start it takes away many peoples worries that the global economy could suffer serious damage in the coming months from a trade war.
Trump campaigned on a vow to get tough on trading partners he accuses of taking advantage of bad trade deals to run up huge trade surpluses with the U.S.
He has slapped taxes on imported steel and aluminum, saying they pose a threat to U.S. national security. The U.S. and EU are now working to resolve their differences over steel and aluminum but the tariffs are still in place. And they would continue to hit U.S. trading partners like Canada, Mexico and Japan even if the U.S. and the EU cut a deal.
