President Donald Trump meets with European Commission President Jean-Claude Juncker in the Oval Office on July 25. | Evan Vucci/AP Photo Trump backs off new tariffs on EU in retreat from trade war

President Donald Trump announced Wednesday that the United States will pause its plans to impose new tariffs against the European Union and work to resolve existing differences over trade in an attempt to avoid a full-blown trade war.

The "new phase" in the trade relationship between Washington and Brussels comes after Trump met with European Commission President Jean-Claude Juncker, who traveled to the White House with his team to attempt to head off potential tariffs on U.S. imports of autos and auto parts.


In a joint statement in the Rose Garden, Trump and Juncker also announced that the two trading partners will work to eliminate tariffs on all non-auto industrial goods, increase cooperation on energy purchases and work together to reform the World Trade Organization.

"This will open markets for farmers and workers, increase investment, and lead to greater prosperity in both the United States and the European Union," Trump said as Juncker stood beside him. “If we team up, we can make our planet a better, more secure and more prosperous place."

The announcement marks a detente in the bilateral relationship, which had grown increasingly tense in recent months after Trump slapped tariffs on nearly all U.S. imports of steel and aluminum, including those from the EU. Brussels had responded by imposing retaliatory tariffs on roughly $3.3 billion in U.S. goods, including products like blue jeans, boats and bourbon.

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Juncker's visit was aimed at cooling the waters. In exchange for commitments from Trump to "reassess" the steel and aluminum tariffs and "hold off on further tariffs," the EU will boost its purchases of U.S. soybeans and build more terminals to import liquified natural gas from America, Juncker said.

"The major progress today is that our American friends agreed not to increase tariffs on cars and other products during the negotiation, which is a major concession by the Americans I have to say," Juncker told reporters following a speech at the Center for Strategic and International Studies.

Wednesday's announcement was only an agreement to begin talks, but the important factor is that Trump will not proceed with threatened car tariffs as long as the negotiations are making progress, Juncker said.

The preliminary agreement was seen as a welcome development by the auto industry, which almost universally opposes tariffs on cars and car parts. The American International Automobile Dealers Association, for one, lauded the "positive discussions" between the two leaders and said its members "are optimistic that today's agreement will lead to progress in resolving auto trade differences."

The U.S. Commerce Department is considering slapping tariffs on foreign autos imported from around the world on the grounds that they are a threat to national security.

EU Trade Commissioner Cecilia Malmström, who traveled with Juncker to the White House, likened progress made between the two sides on Wednesday to “turning a page” in the bilateral relationship, which had gotten increasingly tense in recent months.

Important meeting at the White House today with @JunckerEU and @realDonaldTrump. Turning a page, agreed to facilitate trade between us, looking at zero tariffs on industrial goods, energy and regulatory cooperation. Also intensify work on reform of WTO. — Cecilia Malmström (@MalmstromEU) July 25, 2018

Reaction from other parts of Europe was more muted. Marietje Schaake, a liberal Dutch member of the European Parliament, noted that Juncker’s failure to secure a commitment from Trump to remove the “unjust” steel and aluminum tariffs should be viewed as a failure.

“EU has put de-escalation and mutual benefit of good trade relation first, always, but today’s concession could set dangerous precedent,” she wrote on Twitter.

If #Juncker did not get hard agreement from #Trump on removing the unjust steel & aluminum #tariffs then he did not achieve his goal. EU has put de-escalation and mutual benefit of good trade relation first, always, but today’s concession could set dangerous precedent #trade — Marietje Schaake (@MarietjeSchaake) July 25, 2018

Others noted that while the announcement marks a change in tone, it won't necessarily stop Trump from moving forward with auto tariffs later this year if he changes his mind. Phil Levy, a senior fellow at the Chicago Council on Global Affairs, called the deal "better than nothing" but noted that "it doesn’t seem to solve any of the problems the president flagged – trade deficits, tariffs, subsidies."

"It looks a lot like deals struck with China last year, which of course were a prelude to a full-blown trade war," he said, adding that he doesn't think "this will stop the president from going ahead with auto tariffs in late-August or early September."

The written version of the joint statement outlines commitments that are slightly less comprehensive than those the two leaders mentioned in their Rose Garden remarks. There is no specific mention in writing, for example, that no new tariffs will be imposed, though the statement does include a pledge not to “go against the spirit of this agreement, unless either party terminates the negotiations.”

Asked to explain what exactly the two sides agreed on, an EU official said the U.S. would not impose new tariffs against European autos and auto parts. The EU side’s understanding is that “car tariffs currently in place will stay as they are," the official told POLITICO.

The deal comes after Trump on Wednesday morning blasted “weak politicians“ who have criticized his tariff-heavy trade policies.

“When you have people snipping at your heels during a negotiation, it will only take longer to make a deal, and the deal will never be as good as it could have been with unity,” the president posted on Twitter. “Negotiations are going really well, be cool. The end result will be worth it!“

Doug Palmer and Florian Eder contributed to this report.