Trump strikes a deal with EU to avert trade war

WASHINGTON: The US and the European Union (EU) have announced that they have reached a deal to avert escalating trade tensions and that they will hold off on further tariffs while they work to resolve disputes over steel, aluminium and cars.

US President Donald Trump called it the start of a “new phase” in remarks from the White House on Wednesday, with European Commission president JeanClaude Juncker by his side.

He said the two sides will “resolve the steel and aluminium tariff issues, and we will resolve retaliatory tariffs. We have some tariffs that are retaliatory. And that will get resolved as part of what we’re doing”.

Juncker said that when he accepted Trump’s invitation to talks, “I had the intention to make a deal today. And we made a deal today”. For now, he added, “We will hold off further tariffs, and we will reassess existing tariffs on steel and aluminium.”

Trade between the US and the EU stands at an estimated $1 trillion, and accounts for 50% of global trade. The end of hostilities between the two sides will be watched and parsed by countries around the world which have been dragged into a trade war by Trump’s unilateral tariff on steel and aluminium, including India, which is in the middle of its own negotiations with the US.

The announcement came in an urgent push from the Europeans rattled by Trump’s threat to increase the tariff on the millions of cars the US imports from Europe. But it was not clear if Trump will hold the ceasefire line this time, as he is known to have gone back from previous deals and hit back with more levies such as with China.

For now, there was relief and cheer. “I am pleased to learn that the US and EU reached agreement today to work jointly to reduce trade barriers and, together with other partners, strengthen the World Trade Organization,” International Monetary Fund managing director Christine Lagarde said in a statement. “The global economy can only benefit when countries engage constructively to resolve trade and investment disagreements without resort to exceptional measures.”

Trump said as part of the deal, the US and EU will work towards “zero tariffs, zero non-tariff barriers, and zero subsidies on nonauto industrial goods”. They will also work toward reducing barriers and increasing trade in services, pharmaceuticals, chemicals. He added that the EU will buy soybeans and LNG from the US.

› (The US and the EU will) resolve the steel and aluminium tariff issues... We have some tariffs that are retaliatory. And that will get resolved DONALD TRUMP, US President