President Trump Donald John TrumpBiden on Trump's refusal to commit to peaceful transfer of power: 'What country are we in?' Romney: 'Unthinkable and unacceptable' to not commit to peaceful transition of power Two Louisville police officers shot amid Breonna Taylor grand jury protests MORE and European Commission President Jean-Claude Juncker on Wednesday announced that they have reached a deal to begin resolving a dispute over tariffs and avoid a trade war.

"We agreed today first of all to work together towards zero tariffs, zero non-tariff barriers and zero subsides for the non-auto industrial goods," Trump announced in a joint statement with Juncker in the White House Rose Garden.

The EU has agreed to increase U.S. soybean imports, lower industrial tariffs with the aim of dropping them to zero and work more closely together on regulations and energy, including buying more more liquified natural gas (LNG).

Trump and Juncker said they also would team up to intensify work on improving the World Trade Organization (WTO), a frequent target of Trump.

"We're starting the negotiation right now, but we know very much where it's going," Trump said during a brief joint statement in the Rose Garden on Wednesday afternoon.

Trump said they would "resolve" the retaliatory tariffs as well as the steel and aluminum tariffs that he imposed on the EU in May.

“When I was invited by the president to the White House, I had one intention: I had the intention to make a deal today. And we made a deal today," Juncker said.

Trump also backed off his threat to slap massive tariffs on foreign autos and auto parts.

The U.S. and EU will “hold off on other tariffs” while negotiations proceed, Juncker said.

In May, Trump removed an exemption for the EU and slapped tariffs of 25 percent on imported steel and 10 percent on aluminum.

The bloc responded with retaliatory tariffs on iconic U.S. goods including jeans, bourbon and motorcycles.

“We had a big day, very big,” Trump said, calling the breakthrough “a new phase” in trade relations.

The Obama administration spent several years trying to negotiate a multi-trillion deal with the EU — the Transatlantic Trade and Investment Partnership (TTIP).

But Trump didn't take up the deal or pursue a new round of formal talks with the EU until now, even though the leaders have been talking more in recent months with the threat of metals tariffs looming.

Markets responded favorably to reports of a deal on Wednesday afternoon.

Trump had escalated his rhetoric toward the EU at various times in recent weeks, most notably telling CBS News that he considers the longtime U.S. ally a “foe” because of trade.

Prior to Juncker’s visit to the White House, he had raised the specter of taxing European cars, further ratcheting up concerns that the president would spark a global trade war. But with the promise of no new tariffs, Trump is shelving his plan to slap 25 percent tariffs on foreign autos and auto parts for now.

The U.S. continues to levy tariffs against Canada, Mexico and China, with each of those nations slapping retaliatory tariffs on American goods.

Republican and Democrats alike have warned that tariffs ultimately hurt American workers, but Trump has dug in on the policy.

Sylvan Lane contributed.