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Trump, Juncker announce deal pulling back from US-EU trade war

26 July 2018

President Donald Trump said on Wednesday the United States and the European Union were kicking off talks aimed at lowering trade barriers as officials looked to head off a brewing trade war.

"This is why we agreed today first of all to work together toward zero tariffs, zero non-tariff barriers and zero subsidies on non auto industrial goods", Trump said to applause.

What Trump described as a "big day" came after he slammed the European Union for months only to predict earlier Tuesday before his meetings with Juncker that he thought they would strike a trade deal that will be "good for everybody".

Juncker will suggest two paths, one of which is a deal among major auto exporting nations including the U.S., Europe, Japan and Canada to reduce tariffs on cars.

The Trump administration has imposed tariffs on $34 billion in Chinese goods in a dispute over Beijing's high-tech industrial policies.

Trump has in recent months engaged in a multi-front trade confrontation, imposing steep tariffs on steel, aluminum and tens of billions of dollars in Chinese goods, which sparked swift retaliation against key U.S. farm products like soy and pork.

The EU in particular has responded with retaliatory tariffs on a wide range of US products, including bourbon, blue jeans, cigarettes, and motorcycles.

Congressional Republicans are expressing deep skepticism of Trump administration's plan to bail out farms hit by tariffs, saying farmers want free trade, not handouts.

Kenny says the collateral damage of the Trump administration's trade war is real.

The White House has chose to direct $12 billion in emergency aid to American farmers, to help take the sting out of the trade war that President Donald Trump started. Trump approved a 10 percent tariff on imported steel and a 25 percent tariff on imported aluminum in May.

"While the Administration's effort to mitigate the short-term impact of tariffs on exports and prices through payments to farmers and commodity purchases provides some relief, it is not the solution".

With congressional elections coming soon, the government action underscored administration concern about damage to US farmers from Trump's trade tariffs and the potential for losing House and Senate seats in the Midwest and elsewhere.

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"It is clear to everyone that President Trump has gotten China's attention like never before", Perdue said.

These practices ring of criticisms the US and President Trump have lodged against the Chinese as unfair trading practices.

Many US farm states vote Republican, but Republican candidates in looming congressional elections are anxious about their electoral chances, so the Trump administration has offered farmers a package worth nearly $NZ18 billion.

'China is targeting our farmers, who they know I love & respect, as a way of getting me to continue allowing them to take advantage of the U.S.' Trump wrote.

The U.S. and its European allies are meeting as the dispute threatens to spread to automobile production.

It remains to be seen if the surprise deal, which came together in just three and half hours of talks, will stand the test of time despite Juncker and Trump's "understanding".

"I had intention to make a deal today and we made a deal today", Trump said. He notes that countries "that have treated us unfairly on trade for years" are coming to Washington to negotiate.

Sen. Pat Toomey, R-Pa., said the Agriculture Department was "trying to put a Band-aid on a self-inflicted wound". "This announcement is substantial but we can not overstate the dire consequences that farmers and ranchers are facing in relation to lost export markets".

The president has repeatedly called the European Union - which includes numerous U.S.'s oldest and most committed allies - an unfair trading partner and even labeled it a "foe".

Soybean farmers in Midwestern states, an important group of Trump's voters, were affected by the retaliatory measures imposed by China as a response to USA fresh tariffs.

"The EU is going to start to buy a lot more soy beans - they are a tremendous market - buy a lot of soy beans from our farmers, primarily in the Midwest", Mr Trump said.

Trump, Juncker announce deal pulling back from US-EU trade war