The EU and the US reached agreements in a Wednesday meeting in an effort to avert a trade-war, with discussion of further tariffs off the table for now, according to BBC News. President Donald Trump said he had reached “a very strong understanding” with European Commission chief Jean-Claude Juncker, and the pair promised a “new phase” in relations.
Juncker also described the discussion as a “constructive meeting.” In a joint statement, the pair said the US and EU will “work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods [and] work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products, as well as soybeans.”
Trump introduced import tariffs in March, including 25 percent on steel and 10 percent on aluminum, which will remain in effect. The EU has also responded with $3.2 billion in duties on US goods. However, a working group that will include senior advisors will cooperate to reduce trade barriers and ensure that no new restrictions are put in place during negotiations. The move comes amidst growing fears of an all-out trade war since Trump’s tariffs were put in place, exacerbated by his friendly attitude towards Putin and comparatively tougher language on NATO and the EU, including calling the EU a “foe” when it comes to trade.
His tough trade policies and tariffs have also created risks for Trump domestically, and earlier this week, his administration announced aid for US farmers that will total as much as 12 billion, to compensate for the effects of China’s retaliatory tariffs on US goods.
According to Trump, the EU will now become a “massive buyer” of liquefied natural gas from the US, and the joint statement also said EU imports were indeed set to increase, in order to diversify the EU’s energy supply. Trump also noted the EU has agreed to “buy a lot of soybeans from our farmers.” This was already likely to occur due to market forces, but the meeting yielded a commitment from the EU not to stand in the way.
Trump has also accused the World Trade Organization (WTO) of allowing China to get away with market-distorting subsidies and intellectual property theft. He now says Juncker has agreed to help the US push to reform the organization, according to Fortune, which makes it less likely that the US will exit the WTO, as Trump has reportedly discussed.