U.S., EU ease up trade dispute

Trump says pact avoids auto tariffs

WASHINGTON — President Donald Trump and European leaders pulled back from the brink of a trade war over autos Wednesday and agreed to open talks to resolve a dispute over steel and to tear down trade barriers between the United States and the European Union.

In a hastily called Rose Garden appearance with Trump, European Commission President Jean-Claude Juncker said the U.S. and the EU 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

The tone between Trump and Juncker was friendly, a marked turnabout from the harsh rhetoric the EU and U.S. have exchanged in recent weeks.

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.

“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 U.S. trade official. But he said reaching a detailed trade agreement with the EU would probably prove very difficult.

Wednesday, the tone was conciliatory. Trump and Juncker said they have agreed to work toward “zero tariffs” and “zero subsidies” on non-automotive goods.

Trump told reporters it was a “very big day for free and fair trade” and vowed to “resolve the steel and aluminum 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.”

“We’re starting the negotiation right now, but we know very much where it’s going,” Trump said after talks with European counterparts.

Juncker said he had an “intention to make a deal today and we made a deal today. We have identified a number of areas on which to work together, work towards zero tariffs on industrial goods. That was my main intention, for those to come down to zero tariffs on industrial goods.”

As U.S. soybean farmers have struggled against retaliatory tariffs, Juncker said the EU “can import more soybeans from the U.S. and it will be done.” He said the two sides also agreed to work together to reform the World Trade Organization, which Trump has vehemently criticized as being unfair to the U.S.

Party leaders are increasingly worried that Trump is fanning the political headwinds they’re already facing.

On Wednesday, he took steps to allay Republicans’ anxieties ahead of the midterm elections, postponing a possible second meeting with Russian President Vladimir Putin until next year.

The president met with Congress’ Republican leaders, House Speaker Paul Ryan of Wisconsin and Senate Majority Leader Mitch McConnell of Kentucky, to discuss an annual funding bill to avert a government shutdown a month before the election.

But the leaders also used the White House meeting to express concerns about the political impact of Trump’s approach to Russia and tariffs, according to two people with knowledge of the meeting.

“They’re trying not to [mess] up the election,” said one source close to the two leaders.

At the outset of a sometimes testy hearing with Secretary of State Mike Pompeo, Sen. Bob Corker, the chairman of the Senate Foreign Relations Committee, didn’t conceal his disdain, warning Pompeo that he was testifying before senators “who are filled with serious doubts about this White House and its conduct of American foreign policy.”

McConnell described his and Ryan’s conversation with the president as “routine,” and went out of his way to say that Trump was interested in the status of the Senate’s process for confirming his Supreme Court nominee, Brett Kavanaugh. McConnell told the president it’s “going along nicely.”

Earlier in the Oval Office, Juncker told Trump that the two trading partners were “allies, not enemies,” and said they needed to work together to address recent frictions involving Trump’s threats to impose tariffs on auto imports and EU plans to retaliate.

Trump had placed tariffs on imported steel and aluminum, saying they pose a threat to U.S. national security, an argument that the EU and Canada reject. He had also threatened to slap tariffs on imported cars, trucks and auto parts, potentially targeting imports that last year totaled $335 billion.