EU, US Avoid Trade War as Juncker, Trump Strike Deal to Work for ‘Zero Tariffs’
A doomsday trade war scenario between the European Union and the United States has been avoided at least for the time being as European Commission President Jean-Claude Juncker and US President Donald Trump have agreed to work in order to reduce trade barriers to “zero”.
Juncker and Trump met in the White House on Wednesday in a much anticipated meeting as tension had been building up for some time with Trump’s statements in favor of slapping higher tariffs on EU car exports to the United States.
Those had been followed by EU reactions signaling prepared to retaliate in kind, including by threatening to hit back US exports worth USD 294 billion with tariffs.
Shortly before the Trump – Juncker meeting in Washington, EU Commissioner for Trade Cecilia Malmstrom, who accompanied Juncker, announced the EU was prepared to impose its own tariffs on US goods worth USD 20 billion (EUR 17 billion) if Trump went ahead with his plans.
Earlier this year, Trump imposed tariffs on European steel and aluminium exports, which were followed by retaliatory tariffs by the EU.
Trump then instructed the US Department of Commerce to investigate the import of EU-made cars in terms of America’s national security, and last week he even declared the EU a “foe” to the US because of its trade policies – although German Chancellor Angela Merkel is one of the many voices to have pointed out that the US actually enjoys a positive balance with the EU when services are counted in.
Against this backdrop, Wednesday’s meeting of Juncker and Trump at the White House resulted in somewhat surprisingly positive statements in favor of bringing trade barriers between the EU and the US to zero.
“This was a very big day for free and fair trade,” US President Donald Trump even declared, as cited by BBC News.
He and the President of the European Commission made it clear they would work for zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto goods. They also agreed to try to boost trade in services and agriculture, with the EU agreeing to buy more soy beans and more liquefied natural gas from the US.
“We are starting the negotiation right now but we know very much where it’s going,” Trump stated, speaking from the Rose Garden at the White House alongside Juncker.
He declared their meeting a “new phase in the relationship” between the United States and the European Union.
“The EU is going to start to buy a lot more soy beans – they are a tremendous market – buy a lot of soy beans from our farmers, primarily in the Midwest,” Trump said, adding that the EU was also going to become a “massive buyer” of American liquefied natural gas (LNG).
“I had one intention today, to make a deal, and we made a deal. We have a number of areas on which to work together,” the EU Commission President stated in turn.
“This is, of course, on the understanding that as long as we are negotiating, unless one party stops the negotiations, we’ll hold off further tariffs, and reassess existing tariffs on steel and aluminum,” he added.
“This was a good and constructive meeting. Thank you, Donald,” Juncker concluded.
(Banner image: TV grab from the BBC)