Trump Puts Hold on New Auto Tariffs; Trade Negotiations Commence With Europe
President Donald Trump agreed on Wednesday to refrain from imposing car tariffs while the United States launches negotiations to cut other trade barriers with the European Union. After a meeting at the White House, Trump and European Commission President Jean-Claude Juncker agreed to begin talks that would also seek to resolve U.S. tariffs on steel and aluminum, as well as retaliatory duties from Europe.
It’s the first lull we’ve seen in the trade war in a while. Meanwhile, Chinese trade relations remain as bitter as ever.
According to Reuters, Juncker described Trump’s decision to postpone auto tariffs a “major concession,” saying that the meeting was highly constructive overall. However, automobiles weren’t the primary focus of the discussion. Cars were just a bargaining chip, put aside momentarily as the pair work toward a common goal.
In a joint statement following the meeting, the United States and European Union acknowledged their $1 trillion bilateral trade relationship — noting that it was the largest economic relationship in the world — emphasizing a new focus to further strengthen trade in a manner beneficial to both parties.
“This is why we agreed today, first of all, to work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods. We will also work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products, as well as soybeans,” the statement elaborated. It also noted that both sides would work to better protect American and European companies from unfair global trade practices — a not-so-subtle reference to China.
While the U.S. import tariffs of 25 percent on steel and 10 percent on aluminum will remain in place during the talks, Juncker remained optimistic. “It is the first time that the Americans agreed to reassess the measure that they have taken in the steel and aluminum sector,” he said.
There’s a lot of elements in this arrangement, but the hold on new car tariffs is a huge deal and a major victory for both the European Union and automakers across the globe. The Alliance of Automobile manufacturers said the announcement “demonstrates that bilateral negotiations are a more effective approach to resolving trade barriers, not increasing tariffs.”
President Trump took to Twitter to praise the meeting. “Obviously the European Union, as represented by [Juncker] and the United States, as represented by yours truly, love each other,” he said while posting a photo of the two men kissing.
“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,” Juncker said.
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