The United States and European Union have made an initial agreement to ease the threat of a trade war after European Commission President Jean-Claude Juncker met with US President Donald Trump in Washington.
Trump promised the US would not impose tariffs on the import of European cars, something the US had threatened to do in retaliation to taxes imposed on certain American goods entering Europe following Trump’s decision to levy extra taxes on imported aluminium and steel.
A joint statement said the result of the meeting was the “launch of a new phase in the relationship between the United States and the European Union”.
“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,” the statement read.
“We will also work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products, as well as soybeans.”
The EU said it will also import more liquefied natural gas (LNG) from the US in an attempt to “diversity its energy supply”.
The announcement comes two weeks after Trump criticised Germany for importing large amounts of LNG from Russia and claiming Germany is “captive to Russia” for its dependence on Russian energy.
The relationship between the US and EU has recently taken a nosedive following the US decision to impose tariffs on aluminium and steel from the EU and other allies such as Canada.
Following that decision, Trump had troubled meeting with EU leaders during the G7 summit and during his visit to Europe two weeks ago, where he attended a NATO summit.
Ahead of that NATO meeting, Trump called the European Union a “foe” of the US for “what they do to us in trade” – a statement refuted by European Council President Donald Tusk as “fake news”.
In recent months, Trump has also started a trade dispute with China after the US implemented tariffs for what it called unfair trade practices by Beijing.
To help farmers hurt by the trade war, the US government announced a multi-billion dollar aid package for US farmers.
The $12bn bailout is seen as admission that Americans are being hurt by the president’s protectionist policies.
The money is aimed at shielding farmers from US President Donald Trump’s disputes with China and other leading trading partners.