At a press conference in the Rose Garden Wednesday, July 25th, President Trump stated he and European Commission President Jean-Claude Juncker agreed press pause on new tariffs during trade negotiations.
The meeting is being regarded by experts as possibly the last opportunity to avoid proposed auto tariffs that would add about $11,700 to the MSRP of a European-built car sold in the U.S. The President has stated in the past that the 10% tax on the import if US cars to Europe is unfair in light of the 2.5% rate charged by the U.S. for the import of European cars to the U.S. Trump warned as recently as last week that if the meeting with Juncker was not successful he would move forward with a 25% auto tariff on the grounds of “national security”.
After meeting with Juncker for about 3 hours, Trump stated, “We had a big day, very big. We are starting the negotiation right now, but we know where it is going.”
The negotiations focused on expanding the import of U.S. liquified natural gas and soybeans into Europe and the lowering of industrial tariffs. The agreements reached during the meeting excluded tariffs on cars but paved the way for discussions on U.S. steel and aluminium tariffs as well as duties imposed by the European Union in response to Trump’s initial salvo of tariffs. Perhaps the most important outcome was the agreement to not impose any new tariffs on either side, thus cooling the rapidly escalating trade war.
In a statement made after the meeting Juncker said “We agreed that no other tariffs would be introduced as long as we are in the negotiations. I’m happy that we agreed to this agreement today.” This statement alone seemed to calm the nerves of some in the auto industry including the Alliance of Automobile Manufacturers who released a statement that read in part, “Today’s announcement demonstrates that bilateral negotiations are a more effective approach to resolving trade barriers, not increasing tariffs”.