The United States and the European Union stepped back from an escalating trade war this week with the unexpected announcement of a process to ease tensions and avoid further tariffs.
In an appearance in the White House Rose Garden, President Trump and European Commission President Jean-Claude Juncker say that had agreed to hold off on proposed car tariffs as well as to work to resolve their dispute on steel and aluminum tariffs, while pursuing a bilateral trade deal.
“While we are working on this, we will not go against the spirit of this agreement unless either party terminates the negotiation,” President Trump said. “We also will resolve the steel and aluminum tariff issues, and we will resolve retaliatory tariffs.”
While Washington and Brussels pursue those aims, the EU will import more U.S. soybeans and liquefied natural gas. “We are ready to invest in infrastructure, new terminals, which could welcome imports of liquefied natural gas from the United States and elsewhere but mainly from the United States, if the conditions were right and price is competitive,” European Commission President Juncker said.
The conciliatory statements from Trump and Juncker could temporarily ease fears of a further escalation of a transatlantic trade war but questions remain. President Trump did not definitively agree to suspend steel and aluminum tariffs against E.U countries. And on the same hand, Juncker did not agree to reduce tariffs on U.S. car imports. Trump signaled that he would not impose new tariffs on European goods, such as cars. However, he did not take the option entirely off the table persevering leverage in case the talks falter.
There was not a specific agreement on existing tariffs on automobiles, which had been Trump’s primary source of frustration with European leaders since last year. Although Junker is an important figure in European politics any final deal must be seen as acceptable to a range of leaders of EU nations.
Trump has said that imposing tariffs on foreign cars could push Americans to buy more U.S. automobiles, helping U.S. workers. But critics think tariffs would drive up the costs of all cars and pass those inflated prices onto consumers.
