Following talks between United States president Donald Trump European Commission chief Jean-Claude Juncker, both the parties reached an agreement to avoid an all-out trade war and continue efforts to lower tariffs. Trump described the talks as being “a very strong understanding”.
Following a meeting at the White House that lasted for over two hours, the outcome was described as the beginning of a “new phase” in EU-US relations by Juncker.
The issue of threatened imposition of import tariffs on EU cars was not discussed.
More US liquefied natural gas (LNG) and soybeans is being planned to be bought by the EU.
The joint statement of the two leaders said that they have agreed to “work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods”.
However, the US imposed tariffs on EU steel and aluminum would remain in force.
The two sides pledged to stay away from announcing new trade restrictions during the period that they continue negotiations through an expert working group that would be launched to discuss the issues of enhancing trade and lowering of trade barriers.
There had been a threat of a full-blown trade war between the two parties following the imposition of tariffs on steel and aluminum by the Trump administration and retaliatory tariffs on US goods by the EU.
Additionally, Trump’s criticism of the NATO and the EU and his over cheers for Russian President Vladimir Putin had further strained the EU-US relations.
Trump had even recently described the EU to be a “foe” in trade.
However, the retaliatory tariffs that have bene imposed on eth US by a number of its trading partners have created pressure on Trump domestically. Already China, Canada, Mexico and the EU have imposed retaliatory tariffs on a range of US products.
The latest casualty in the ongoing US-China trade spat apparently is US chipmaker Qualcomm Inc which has had to walk out of an announced takeover of NXP Semiconductors for $44 billion because the US company was unable to obtain an anti trust clearance from the Chinese authorities.
In order to placate some of the domestic pressures, the Trump government announced a $12 billion aid package for US farmers on Tuesday.
Trump declared a “new phase in the relationship” between the US and the EU, calling it a “very big day for free and fair trade” while speaking at the White House after the meeting w3iht Junker. “We are starting the negotiation right now but we know very much where it’s going,” he said.
The meeting was hailed to be a “constructive meeting” by Juncker.
“The EU is going (…) to buy a lot of soy beans from our farmers, primarily in the Midwest,” Trump said.
(Adapted from BBC.com)