US markets rallied on Wednesday after the European Union agreed to import more soybeans from the United States, buy more liquefied natural gas (LNG) from the US, and lower industrial tariffs, concessions that appear to have averted a deepening trade war.

At an unscheduled press conference in the White House Rose Garden following a meeting between US president Donald Trump and European Commission president Jean-Claude Juncker, Mr Trump confirmed that the EU had agreed to work towards zero tariffs on industrial goods and to co-operate more on energy.

“The European Union wants to import more liquefied natural gas from the United States. They’re going to be a massive buyer, so they’ll be able to diversify their energy supply,” Mr Trump said. “We agreed to launch a close dialogue on standards in order to ease trade, reduce bureaucratic obstacles and slash costs dramatically.”

A high-level working group between the two sides has also been set up, while both sides committed to working together to reform the WTO and address unfair trading practices including intellectual property theft, an issue the US has raised with China.

“I had an intention to make a deal today, and we made a deal today,” said Mr Juncker after the meeting.

Easing tensions

The development eases tensions between the two trading blocs, and appears to have averted an escalation of trade tensions which could have led to the US imposing tariffs on car imports from Europe.

While Mr Trump and Mr Juncker have met several times before at G7 meetings, this is the first visit by the European Commission president to meet Mr Trump at the White House.

Mr Trump said he was “honoured” to host Mr Juncker at the White House. “He’s a man that I’ve gotten to know very well. He represents his people well, and the countries well,” he said, adding that he was “very smart and tough”.

“Hopefully we can work something out,” he said.

Mr Juncker thanked the US president for “taking the initiative” of inviting him to the White House.

Hours before the meeting, EU trade commissioner Cecilia Malmström said that the EU was preparing tariffs of $20 billion on US goods if the US goes ahead with car tariffs.

The EU taxes American cars 10 per cent, while the US only puts a tax of 2.5 per cent on cars imported from the European Union.

But the EU points out that its taxes on American trucks, clothes and other products is much lower, while the US taxes EU trucks at 25 per cent.

WTO rules also mean that, if the EU cuts tariffs on American cars, it would also have to do so for other WTO countries.

Ahead of the meeting, Mr Trump defended his trade policy on Twitter.

“Tariffs are the greatest! Either a country which has treated the United States unfairly on Trade negotiates a fair deal, or it gets hit with Tariffs. It’s as simple as that – and everybody’s talking! Remember, we are the ‘piggy bank’ that’s being robbed. All will be Great!”