Vague promises help EU's Jean-Claude Juncker ease U.S. trade tension

Trump holds off on planned EU car tariffs

European Commission president Jean Claude Juncker and US President Donald Trump in the Rose Garden of the White House

In negotiations with the US, China had hoped, but failed, to stave off a tariff battle with promises to purchase more agricultural and energy products from the US.

The "game" began in March when Trump levied tariffs on imported steel and aluminum. "Are the three majors that are going to be implemented going to affect farmers fairly or are corporations going to be the benefactors of those major.I think they're also really anxious about a prolonged trade war", said Julie Keown-Bomar, Executive Director for the Wisconsin Farmers Union.

Under the deal, the U.S. and the European Union will work together towards zero tariffs, zero non-tariff barriers and zero subsidies on non-auto industrial goods.

Mr Trump added the USA and European Union are "starting the negotiation right now but we know very much where it's going", as he outlined an agreement to work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, and medical products.

The outcome seemed a victory for Mr. Trump, who had assured supporters that his confrontational trade strategy would bear fruit, and who appears to have conceded little in the talks with the EU.

Still, however, the Republicans in the room brought up that farmers are now feeling significant pain because of shrinking markets, and that the administration needs to finalize and rework trade agreements with foreign partners as soon as possible.

European governments and EU officials hailed the Trump-Juncker agreement as a major success.

But Trump has form in doing U-turns, and U-turns on U-turns, on his own commitments.

Three of the world's biggest vehicle makers have claimed that trade policy changes are having a negative impact, with Ford, General Motors and Fiat Chrysler Automobiles all reporting lower profit or revenue forecasts.

But "if he continues to demand tariff increases as he has been, or if he continues to agree with those who are against China, I definitely would not be able to accept (more orders)", she said.

Heiko Mass, Germany's foreign minister, also reacted cautiously.

"Today's announcement demonstrates that bilateral negotiations are a more effective approach to resolving trade barriers, not increasing tariffs", the alliance said in a statement.

So how exactly did Juncker manage to coax this about-face from Trump?

General Motors has told the commerce department that, despite Trump's assertion that tariffs would help American companies and American workers, it expects tariffs to result in "less investment, fewer jobs and lower wages".

However, Reuters is reporting that a top German industry group is sceptical, saying the tariffs are not yet off the table and there is still no real resolution.

But he also cautioned that the United States is watching China's currency movements for any sign Beijing is manipulating the yuan.

The two men kissed for cameras at the White House.

European Commission President Jean-Claude Juncker agreed that "this was a good and constructive meeting". "Thank you, Donald", Juncker said in the Rose Garden.

"We have an outline: the first phase of that as we've said is to deal with the steel and aluminum tariffs, the reciprocal tariffs, will be part one", explained the treasury secretary.

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