Published: Thu, July 26, 2018
Finance | By Gustavo Carr

European Union and United States kiss and make up on trade

European Union and United States kiss and make up on trade

Jean-Claude Juncker, the president of the European Commission, said that the EU and the US will "hold off further tariffs and reassess existing tariffs on steel and aluminum".

The meeting comes at a critical time for the trade relationship between the European Union and the U.S. After the 10 percent tariff on aluminum and 25 percent on steel, The Washington Post reported that Trump is considering slapping a 25 percent tariff on automobiles, an idea that has drawn fierce criticism from European Union officials - from where many U.S. auto imports originate.

"This was a very big day for free and fair trade, a very big day indeed", Trump told reporters at the White House after meeting with European Commission President Jean-Claude Juncker.

Sen. John Hoeven, R-N.D., said Trump and U.S. Trade Representative Robert Lighthizer said they are still planning to have a reworked NAFTA by early fall, and that Lighthizer pledged to provide the lawmakers with details on several other smaller agreements he said were coming together, including with South Korea and South America. "We have identified a number of areas on which to work together, work towards zero tariffs on industrial goods".

In a Rose Garden announcement, Trump said the European Union had also agreed to buy USA soybeans, a day after he announced a $12 billion bailout package for farmers hit by retaliatory tariffs.

The US sells about $14 billion worth of soybeans annually to China, the world's top buyer of the commodity.

On a call explaining the assistance, the administration said the $12 billion value of the package was in line with the estimated $11 billion hit to farmers from recent trade tensions. Trump approved a 10 percent tariff on imported steel and a 25 percent tariff on imported aluminum in May.

Tariffs have irked farmers, a crucial voting bloc for President Donald Trump.

G20 ministers call for greater dialogue on trade tensions
G20 ministers call for greater dialogue on trade tensions

But some of those issues seemed to be resolved during Wednesday's meeting.

Trump fired off fresh salvoes against Beijing on Wednesday via a tweet, decrying China's "targeting" of USA farmers and insisting that the U.S. will no longer "play nice".

The two leaders faced off over escalating dispute over tariffs and trade barriers that block US goods. It involves direct payments to farmers, the purchase of excess food and trade promotion programs to help create new export markets.

The biggest news from the Trump-Juncker meeting is that it appears to have delayed an impending trade war over autos. In May, Trump abandoned a framework for trade negotiations with China within days of it being announced, before ratcheting up tariffs.

He has slapped taxes on imported steel and aluminum, saying they pose a threat to US national security.

On Tuesday, the administration announced a plan to give farmers some relief. Canada, Mexico and the European Union have said they are prepared to respond.

Mr Juncker said striking a deal on zero tariffs on industrial goods was his "main intention". The written text was short on specifics and trade analysts described it as largely an agreement to do more talking.

In return, "the European Union is going to start, nearly immediately, to buy a lot of soybeans ... from our farmers", Trump said. Danielson, whose farm is in Cadott, says almost 20 percent of the dairy products and around 50 percent of the soybeans he produces are exported.

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