Trump announces a ‘new phase’ in US-EU relationship, working toward ‘zero tariffs’

  • President Donald Trump on Wednesday announced that he had secured concessions from Europe, averting a potential trade war.
  • The Dow Jones Industrial Average popped Wednesday afternoon, rising more than half a percent on the news.
  • The Europeans agreed to lower industrial tariffs and import more U.S. soybeans.

    President Donald Trump on Wednesday said the United States and the European Union had launched a “new phase” in their relationship, saying that the two major economies would start negotiations immediately on a number of areas including working toward “zero tariffs” on industrial goods and further cooperation on energy issues.

    “We agreed today first of all to work together towards zero tariffs, zero nontariff barriers and zero subsides for the non-auto industrial goods,” Trump said Wednesday.

    The announcement came during a joint press fconference in the White House Rose Garden with Trump and European Commission President Jean-Claude Juncker.

    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. “This was a good, constructive meeting,” he added.

    The major averages rallied earlier in the day following a report in The Wall Street Journal stating that Trump had secured a number of concessions from the E.U.

    The Dow Jones Industrial Average popped more than half a percent to a session high Wednesday afternoon. The NASDAQ rose about 1 percent. The euro also rose, hitting a session high against the dollar.

    European Commission spokesperson Kinga Malinowska said that Juncker had not yet made any concessions.

    “All I can say is that the talks are ongoing,” Malinowska said in a statement. “President Juncker is working to avert new tariffs. No concessions made.”

    Trump said earlier on Wednesday, during a meeting with Juncker, that he hoped “to work something out on a fair trade deal with Europe.”

    Trump and Juncker both said their aim was to lower tariffs and trade barriers between the U.S. and Europe. “If we can have no tariffs, and no barriers and no subsidies, the United States would be extremely pleased,” Trump said.

    The president said he and Juncker were working to achieve a “reciprocal” trade relationship. “We’re making tremendous strides,” Trump said, “and we expect something very positive to take place.”

    In brief remarks, Juncker also stressed the importance of meeting face-to-face, and threw a subtle jab at Trump’s habit of tweeting threats at U.S. trading partners. “I think we have to talk to each other, and not at one another,” Juncker said. “That’s what we’ll do today.”

    On Tuesday, Trump wrote a tweet that could be seen as the president talking “at” the Europeans. “The European Union is coming to Washington tomorrow to negotiate a deal on Trade,” he tweeted. “I have an idea for them. Both the U.S. and the E.U. drop all Tariffs, Barriers and Subsidies! That would finally be called Free Market and Fair Trade! Hope they do it, we are ready – but they won’t!”

    Trump Tweet

    Juncker’s visit came during what many experts see as an historic low-point for U.S.-European relations, which have become frayed by Trump’s trade wars, his fondness for Russian President Vladimir Putin and Trump’s skepticism of multilateral institutions like NATO and the European Union.

    In announcing Juncker’s visit, the White House said in a statement on July 17 that the two men would discuss “a wide range of priorities, including foreign and security policy, counterterrorism, energy security, and economic growth,” with a “focus on improving transatlantic trade and forging a stronger economic partnership.”

    Trump’s own comments about Europe, however, have repeatedly stood in stark contrast to the White House message. “The European Union — outside of China and a couple of others — treats us, on trade, as badly as you can be treated,” Trump said during a May visit from NATO Secretary General Jens Stoltenberg. “They have trade barriers. Our farmers aren’t allowed, to a large extent, to sell their product into the European Union.”

    According to Trump’s own Department of Agriculture, however, this is not true. On the contrary, the USDA reported that in 2017, American agricultural exports to the European Union totaled $11.2 billion, making Europe the fifth largest export market in the world for U.S. farmers.

    CNBC’s Kayla Tausche contributed to this report.

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