US, EU agree to resolve US tariffs on steel, aluminum imports

WASHINGTON -- President Donald Trump and European leaders pulled back from the brink of a trade war over autos Wednesday and agreed to open talks to resolve a dispute over steel and to tear down trade barriers between the United States and the European Union.

In a hastily called Rose Garden appearance with Trump, European Commission President Jean-Claude Juncker said the U.S. and the EU agreed to hold off on new tariffs, suggesting that the United States will suspend plans to start taxing European auto imports - a move that would have marked a major escalation in trade tensions between the allies.

The tone between Trump and Juncker was friendly, a marked turnabout from the harsh rhetoric the EU and U.S. have exchanged in recent weeks.

Trump also said the EU had agreed to buy "a lot of soybeans" and increase its imports of liquefied natural gas from the U.S.

"It's encouraging that they're talking about freer trade rather than trade barriers and an escalating tariff war," said Rufus Yerxa, president of the National Foreign Trade Council and a former U.S. trade official. But he said reaching a detailed trade agreement with the EU would probably prove very difficult.

During a recent European trip, Trump referred to the EU as a "foe, what they do to us in trade." Juncker, after Trump imposed tariffs on steel and aluminum imports, said in March that "this is basically a stupid process, the fact that we have to do this. But we have to do it. We can also do stupid."

On Wednesday, the tone was conciliatory. Trump and Juncker said they have agreed to work toward "zero tariffs" and "zero subsidies" on non-automotive goods.

Trump told reporters it was a "very big day for free and fair trade" and vowed to "resolve the steel and aluminum tariff issues and we will resolve retaliatory tariffs. We have some tariffs that are retaliatory and that will get resolved as part of what we're doing."

"We're starting the negotiation right now, but we know very much where it's going," Trump said after talks with European counterparts.

Juncker said he had an "intention to make a deal today and we made a deal today. We have identified a number of areas on which to work together, work towards zero tariffs on industrial goods. That was my main intention, for those to come down to zero tariffs on industrial goods."

As U.S. soybean farmers have struggled against retaliatory tariffs, Juncker said the EU "can import more soybeans from the U.S. and it will be done." He said the two sides also agreed to work together to reform the World Trade Organization, which Trump has vehemently criticized as being unfair to the U.S.

Earlier in the Oval Office, Juncker told Trump that the two trading partners were "allies, not enemies," and said they needed to work together to address recent frictions involving Trump's threats to impose tariffs on auto imports and EU plans to retaliate.

Trump had placed tariffs on imported steel and aluminum, saying they pose a threat to U.S. national security, an argument that the EU and Canada reject. He had also threatened to slap tariffs on imported cars, trucks and auto parts, potentially targeting imports that last year totaled $335 billion.

The European Union had warned that it would retaliate with tariffs on products worth $20 billion if Trump puts duties on cars and auto parts from Europe.

Trump's progress with EU leaders was greeted by farm-state lawmakers who have been concerned about the impact of retaliatory tariffs on soybeans and other crops.

Sen. Chuck Grassley, R-Iowa, said what farmers in his home state need "and this might be helpful in this direction- is they got to know that this thing isn't going to go on forever."

Sen. Lindsey Graham, R-S.C., tweeted that the agreement "not to impose additional tariffs during negotiations is very smart and the best way to achieve a win-win solution."

He added: "Now is the time for EU and US - both victims to unfair China trade practices - to unite against China."