Trump, EU leaders pull back from trade war
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 US and the European Union.
But the agreement was vague, the coming negotiations with Europe are sure to be contentious and the US remains embroiled in major trade disputes with China and other trading partners.
In a hastily called Rose Garden appearance with Trump, European Commission president Jean-Claude Juncker said the US and the EU have 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 US. And the two agreed to resolve a dispute over US tariffs on steel and aluminum.
“It’s encouraging that they’re 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 US 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.” Juncker, after Trump imposed tariffs on steel and aluminum imports, said in March 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 president 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 US
He has slapped taxes on imported steel and aluminum, saying they pose a threat to US national security. The US 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 US trading partners like Canada, Mexico and Japan even if the US and the Whatever EU cut a deal. progress was achieved Wednesday could provide some relief for US automakers. The escalating trade war and tariffs on steel and aluminum had put pressure on auto company earnings. General Motors had slashed its outlook, and shares of Ford Motor Co. and auto parts companies had fallen. “Our biggest exposure, our biggest unmitigated exposure, is really steel and aluminum when you look at all of the commodities,” GM CEO Mary Barra said Wednesday.