US, EU ease trade spat, plan to slash tariffs, subsidies, barriers

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US President Donald Trump and European Commission President Jean-Claude Juncker announced the outlines of the deal that would slash tariffs and other barriers to trade after a White House meeting. PIX: Alex Edelman/CNP via ZUMA Wire/dpa
US President Donald Trump and European Commission President Jean-Claude Juncker announced the outlines of the deal that would slash tariffs and other barriers to trade after a White House meeting. PIX: Alex Edelman/CNP via ZUMA Wire/dpa

The United States and the European Union agreed on Wednesday to ease trade tensions while continuing to negotiate the details of a far-reaching agreement that would slash tariffs and other barriers to trade.

US President Donald Trump and European Commission President Jean-Claude Juncker announced the outlines of the deal after a White House meeting.

Trump said the two sides would “work together toward zero tariffs, zero non-tariff barriers and zero subsidies on non-auto industrial goods.”

“We will also work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products, as well as soybeans,” he said in the White House Rose Garden.

The deal has similarities to the Transatlantic Trade and Investment Partnership (TTIP) trade deal, which stalled during negotiations in 2016 between Washington and Brussels.

Trump last month slapped tariffs on steel and aluminium from the EU, which responded by imposing higher import taxes on 3 billion dollars worth of US goods ranging from peanut butter to whiskey and Harley Davidson motorcycles.

The US and EU will set aside trade tensions during talks, with a working group of “our closest advisors” to begin work immediately to achieve their shared goals, accoding to a joint statement.

“This of course is on the understanding that as long as we are negotiating – unless one party would stop the negotiations – we hold off further tariffs and we reassess existing tariffs on steel and aluminium,” Juncker said.

It was not immediately clear if the recent tariffs would remain in place.

“We’re starting the negotiation right now, but we know very much where it’s going,” Trump said.

The agreement came a day after Trump called the European Union a “big abuser” of trade relations.

On Wednesday in the Oval Office, Trump repeated his claim in Juncker’s presence that the United States has lost “hundreds of billions of dollars” due to EU trade barriers.

“We are close partners, allies, not enemies,” Juncker said in the Oval Office. “We have to work together.”

Trade tensions are already reverberating in the real economy, with the US Agriculture Department this week announcing 12 billion dollars in relief for farmers suffering disproportionately from “unjustified retaliation.”

The “short-term” aid plan drew sharp criticism from conservative Republican lawmakers, who have already been unsettled by Trump’s protectionist policies.

When announcing the agreement, Trump called soya “a big deal.”

“The European Union is going to start, almost immediately, to buy a lot of soybeans – they’re a tremendous market – buy a lot of soybeans from our farmers in the Midwest, primarily,” he said.

Trump had turned his ire early Wednesday on “weak” politicians, whom he accused of undermining his strategy of countering “unfair tariffs” with protectionist measures.

“The end result will be worth it!” he vowed.

In South Africa, Chinese President Xi Jinping warned that “unilateralism and protectionism are mounting,” and said there would be “no winner” in a global trade war.

Washington this month imposed tariffs on 34 billion dollars worth of Chinese goods, drawing retaliation from Beijing, and the Commerce Department is investigating whether imports of cars and car parts could be a threat to national security. -DPA

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