The deal reached between Junker and Trump is likely to be the foundation for formal agreements between the EU and the US based on WTO guidelines.
In a significant development, the meeting of the European Commission President Jean-Claude Juncker with U.S. President Donald Trump to avert a trade war has resulted in Trump backdown from opening a second front and appears to have given grounds on his threat to impose 25% tariffs on cars and auto parts imported from the EU to the U.S.
Earlier Germany, home of some of the biggest carmakers in the world, including Daimler AG and Volkswagen AG, had warned that such a tariff would have hit the automotive industry hard which could result in the job loss of hundreds and thousands of people and would cost the industry a whopping $83 billion.
Hailing the breakthrough, German Economy Minister Peter Altmaier said, the measures agreed by Juncker and Trump could help save millions of jobs and avoid a trade war.
“The proposed solutions move in the right direction, but a significant portion of scepticism remains,” said Eric Schweitzer, president of the German Chambers of Industry and Commerce (DIHK), following the meeting of Juncker with Trump. He went on to add, it was up now up to Washington to rebuild the basis of trust with Europe, and remove the tariffs.
The meeting underscored the fact that countries in the European Union would stand shoulder to shoulder and would not let itself be divided.
“Only united as Europeans do we have sufficient economic and political weight to effectively represent our interests,” said Schweitzer. “Without strong European answers, there is a danger that only we will make concessions and in response face new unreasonable demands from the USA.
Schweitzer also called for a comprehensive agreement between the two countries based on the guidelines of the World Trade Organisation (WTO).
He went on to add, companies from the EU face non-tariff barriers while doing business in the United States, including those involved in winning government contracts, or those related to different regulations in various U.S. states.