Trump, EU Chief Agree to Pursue Trade Peace Pact

Trump, EU Chief Agree to Pursue Trade Peace Pact

US President Donald Trump and European Commission chief Jean-Claude Juncker on Wednesday have announced a series of joint steps to defuse an escalating row between the two trading blocs.

The EU would increase purchases of liquefied natural gas (LNG) from the United States, President Trump said, making them a "massive buyer".

Juncker said the two leaders agreed that as long as negotiations were ongoing, "we'll hold off further tariffs and reassess existing tariffs on steel and aluminum" put in place by the Trump administration.

Minutes later, at a conference at the Center for Strategic and International Studies, Juncker said that the agreement emphasised the "special" nature of the alliance between the United States and the European Union going on to stress that trade between the two parties comprises half of all global commerce.

The two leaders faced off over escalating dispute over tariffs and trade barriers that block US goods.

"This is a short-term solution that will give President Trump and his administration time to work on long-term trade deals that benefit agriculture and all sectors of the economy", US Agriculture Secretary Sonny Perdue said.

Germany's economy minister described the agreement - which means Washington will not follow through with a threat to impose tariffs on autos that would hurt the dominant German vehicle industry - as a "breakthrough" that "can avoid trade war".

Trump on Wednesday was to meet European Commission President Jean-Claude Juncker, who has dampened hopes that their talks would resolve the trade dispute.

Auto tariffs at the level Trump has threatened would add about 10,000 euros (US$11,700) to the sticker price of a European-built vehicle sold in the USA, according a European Commission assessment obtained by Bloomberg News last month.

The overtures are a last-ditch attempt to persuade him from imposing tariffs on European vehicle exports to the US, in what could deal a serious blow to the bloc's economy.

Mr Trump, speaking at an event in Kansas City on Tuesday, reaffirmed his support for tariffs and pledged that "farmers will be the biggest beneficiary". "To run this program, we need producers to harvest their crops", said USDA farm program official Brad Karmen, because payments will be based on this year's crops. He said the US and European Union would "resolve" the steel and aluminum tariffs he imposed earlier this year and the retaliatory tariffs the European Union imposed in response. He went on to say the US and European Union will work to reform the World Trade Organization (WTO) and address unfair trade practices from other countries, an apparent reference to China's practices.

The EU responded by imposing tariffs on over $3bn (€2.56bn) of U.S. goods, including iconic brands of whiskey and motorcycles.

Many of them, from farm states, were also planning to relay messages from their constituents about how they would prefer markets be reopened than rely on additional government aid, as the White House had recently suggested with an offer of $12 billion for farmers affected by tariffs.

"Anything that disrupts the regular market channels is going to have an impact right here in the Valley", said Tom Stanley, an agent with Virginia Cooperative Extension, who added tariffs can have a disproportionate impact on agriculture due to the industry's dependence on exports.

"Any time there are trade issues, embargoes, that sort of thing, or tariffs, it has been negative for agriculture", Recker said.

Trump's enthusiasm about Wednesday's trade negotiations are a significant change from remarks he made on Twitter just 24 hours earlier, when declared "tariffs are the greatest".

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