Published: Thu, July 26, 2018
Markets | By Otis Pena

Trump Announces Plan To Work With EU To Strengthen Trade Relationship

Trump Announces Plan To Work With EU To Strengthen Trade Relationship

President Donald Trump on Wednesday lashed out at China over the latest escalation in the trade spat between the world's two largest economies.

The tone between Trump and Juncker was friendly, a marked turnabout from the harsh rhetoric the European Union and US have exchanged in recent weeks.

Trump says a 10 per cent tax on imports of cars to the European Union is too high compared to the 2.5 per cent rate charged by the U.S, and he's also been critical of the European Union over its US$150 billion trade surplus with the U.S.

The US trade deficit with China in 2017 came in at $375.6 billion, according to Census Bureau data, though adding that figure to this year's data through May comes out to about $528 billion.

Trade analysts responded with cautious positivity, though they noted the lack of details and Trump's unpredictability.

"The word that we got from staff was, as it was coming together, [Trump] was saying, 'OK, what's the next meeting?' And they said, 'Mr". But we have to do it. "We can also do stupid".

On Wednesday, the tone was conciliatory.

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The leaders agreed to "launch a new phase" in the relationship and "to work together towards zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods", Trump said.

Trump told reporters it was a "very big day for free and fair trade" and later tweeted a photo of himself and Juncker in an embrace, with Juncker kissing his cheek.

However, the deal was contingent "on the understanding that as long as we are negotiating. we will hold off further tariffs, and we will reassess existing tariffs on steel and aluminum". That was my main intention to propose to come down to zero tariffs on industrial goods. The EU has a huge stake in the US industry, where European companies produce nearly 3 million cars a year, accounting for over a quarter of production in the United States. Before the talks with Juncker, Trump has threatened to impose additional penalties on trading partners as he prepares for talks with European officials at the White House.

"Our emphasis continues to be on trade and restoring markets, and we will continue to push for a swift and sure end to the trade war and the tariffs impacting American agriculture", Duvall said. Since March, he has imposed blanket tariffs on almost all imports of steel and aluminum and placed penalties on $34 billion in goods from China, a total likely to increase to $50 billion next month and into the hundreds of billions later this year. The plan will take effect around Labor Day, with the $12 billion total "calculated to match the estimated $11 billion of economic damage that retaliatory tariffs will inflict on USA farmers", officials told The Washington Post. The U.S. and European allies have been at odds over Trump's tariffs on steel imports and are meeting as the trade dispute threatens to spread to automobile production.

The two leaders did not specifically mention vehicle tariffs in their statements, keeping the focus on other industrial products.

Giesse, who grows wheat and corn near the western Kansas community of Larned, said he was "glad they are trying to be doing something, but I don't know when the day is over how much difference it is going to make". Sens. Lindsey Graham, R-S.C., and Jeff Flake, R-Ariz., both expressed skepticism of the aid, and urged the president to solve the trade dispute.

They still delivered that message but they also asked questions about the White House's time frame for completing the trade agreement with Europe and about whether this deal will lead to the completion of other major agreements, like a renegotiated North Atlantic Free Trade Agreement.

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