Trump Puts Hold on New Auto Tariffs; Trade Negotiations Commence With Europe

Matt Posky
by Matt Posky
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.

[Image: Twitter]

Join the conversation
12 of 78 comments
  • Arthur Dailey Arthur Dailey on Jul 27, 2018

    U.S. Senate just passes a bill to reduce tariffs on over 1,600 Chinese manufactured products, including home appliances. Winning??????????

    • See 2 previous
    • TW5 TW5 on Jul 27, 2018

      It means there is trade liberalization going on behind the scenes, and unlike Obama who brokered trade deals behind Congress' back illegally, President Trump is asking Congress to pass legislation. More importantly, we are dealing with China directly, rather than trying to deal with China indirectly via NAFTA. The situation is a bit scary because we are passing laws and trusting the Chinese to stop their shenanigans. It's a precarious position because if Beijing do not stop, Congress will have even more power to continue selling off our economy to keep the donors happy. Hopefully we have other forms of leverage.

  • Sub-600 Sub-600 on Jul 27, 2018

    GDP jumps by 4.1%. Donaldus Maximus is getting the job done on all fronts. I don’t see how Americans can find fault with these results. Canadians and Australians are another thing, although I don’t know how U.S. failure would benefit either country. To each his own.

    • See 6 previous
    • TW5 TW5 on Jul 28, 2018

      @ BAfO .5% of GDP is $100B. Let's be charitable and suppose the BEA forgot how to do it's job and $100B is just an extra $25B in soybean contracts Q2. That is twice the US normal rate of export, and it's more than America's total annual soybean production. Do I need to make you some flash cards so you stop falling for fake news or do you understand it this time? Whatever soybean contract he negotiated is merely a tiny fraction of Q2 GDP, and even if it was .5% annualized, the economy still grew at over 3.5% The soybean argument was created by the media to provide cover for intellectual infants who despise the president and the path we are taking to freer trade.

  • Tassos Government cheese for millionaires, while idiot Joe biden adds trillions to the debt.What a country (IT ONCE WAS!)
  • Tassos screw the fat cat incompetents. Let them rot. No deal.
  • MaintenanceCosts I think if there's one thing we can be sure of given Toyota's recent decisions it's that the strongest version of the next Camry will be a hybrid. Sadly, the buttery V6 is toast.A Camry with the Highlander/Sienna PSD powertrain would be basically competitive in the sedan market, with the slow death of V6 and big-turbo options. But for whatever reason it seems like that powertrain is capacity challenged. Not sure why, as there's nothing exotic in it.A Camry with the Hybrid Max powertrain would be bonkers, easily the fastest thing in segment. It would likewise be easy to build; again, there's nothing exotic in the Hybrid Max powertrain. (And Hybrid Max products don't seem to be all that constrained, so far.)
  • Analoggrotto The readers of TTAC deserve better than a bunch of Kia shills posing as journalists.
  • Lou_BC How do they work covered in snow, ice, mud, dust and water? Vibration?