Trump,TT EU announce non- specific agreement to reduce trade tensions
Deal to hold off on tariffs similar to one with China before U. S. exacted duties
WASHINGTON— Reducing trade tensions, U. S. President Donald Trump and the president of the European Commission have come to a vague preliminary agreement a to hold off on new tariffs while they conduct additional negotiations.
It was not clear whether the Wednesday WW agreement would amount aaa lasting to change. a temporary The truce written or text was short on specifics and trade analysts described it as largely an agreement to do more talking.
But stock markets immediately jumped on the news that Trump had decided to step back from his threats. And analysts said Trump’s softening could possibly be a positive sign for Canada.
Trump made no specific commitments about the automotive tariffs he had been threatening, or on the steel and aluminum tariffs he already imposed. He said, however, that he would “resolve” the steel and aluminum nn tariffs on Europe in the course of the talks.
European Commission President Jean- Claude Juncker said that tt the commitments he made to Trump — importing more U. UU S. soybeans, building termi- nals to import more U. S. liquefied natural gas, working toward ww the reduction of trade bar- riers — were contingent on the understanding that both sides “will hold off further tariffs” and aa will “reassess existing tar- iffs on steel and aluminum.”
Trump also said he would pursue generally freer trade with Europe. His words suggested he was open to something resembling the Transatlantic Trade and Investment Partnership, a proposed U. S.- Europe agreement a on which negotia- tions have stopped.
“We agreed today, first of all, to work ww together toward zero tar- iffs, zero nontariff barriers and zero subsidies on non- auto industrial goods,” he said at an unscheduled appearance with Juncker after their White House meeting. “We will also work ww to reduce barriers and in- crease trade in services, chemicals, pharmaceuticals, medical products, as well as soybeans.”
Trade analysts responded with ww cautious positivity, though t they noted the lack of details and Trump’s unpredictability. Trump announced a similar reprieve with China in May, only to impose tariffs.
“It’s a positive step, but one that tt we’ll have to see if this truly is progress,” said Dan Ujczo, a trade lawyer at Dickinson Wright WW in Ohio. He said the w world is “still in wait- and- see mode” on auto tariffs, citing recent articles saying Trump wants to impose them.
Marta Bengoa, professor and head of the economics department at the Colin Powell School at aa the City College of New York, said the deal was encouraging, but noted that an accord with Juncker JJ is not the same as ac- cord with the EU’s 28 members.
“I anticipate if negotiations ever happen — could just be soft words ww and diplomacy without f followup or real commitment — it will be a complex negotiation process in which European member states will have to weigh in as well as the EU Council. Trade is complex and it is never as simple as the handshake in between two men,” Bengoa said in an email.
Trump made the deal under increasing pressure to abandon his tariffs. In a series of tweets on Wednesday, he called his critics “weak” and said: “Negotiations are going really well, be cool. The end result will be worth it!”
Canada could benefit from a Trump decision to put off auto tariffs on Europe. While he has been threatening the tariffs on all countries, his primary complaint has been with European imports.
Trump’s expressed willingness to bend on steel and aluminum tariffs can be seen as a good sign for Canada, Ujczo said, since it suggests that Trump may again be willing to “lift the tariffs if there’s progress on other trade fronts.” North American Free Trade Agreement AA talks are resuming t this week.
Canada’s Foreign Affairs minister, Chrystia Freeland, met with ww Mexican officials Wednes- day. Mexican Economy Minister Ildefonso Guajardo, rejecting Trump’s suggestion of separate aa trade deals with Canada a and Mexico, said, “The essence of this agreement is trilateral and it will continue being trilateral.”