WASHINGTON -- The U.S. the European Union agreed to pull back from an all-out trade war in a meeting between President Donald Trump and European Commission President Jean-Claude Juncker at the White House on Wednesday.
In a joint press statement after their meeting, the two leaders said they will work toward bringing tariffs down to zero on industrial goods, excluding cars, and that the EU will increase imports of U.S. soybeans and liquefied natural gas.
The two sides will establish a "high-level working group" to iron out the details. "While we are working on this, we will not go against the spirit of this agreement," Trump said, signaling that the controversial 25% tariff on imported cars and auto parts that he has been considering will also be put on hold.
Juncker followed up by saying, "As long as we are negotiating, unless one party would stop the negotiations, we will hold off further tariffs, and we will reassess existing tariffs on steel and aluminum."
"Based on the negotiations with the EU and the member countries of NAFTA, it seems less and less probable that Trump will move quickly to implement auto tariffs," said Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities. "But it is still a big risk scenario that should not be ignored."
"Japan should also recognize the risk that the U.S. might see auto imports from Japan as a problem, separately from EU or NAFTA members," he said.
Nikkei staff writer Masayuki Yuda in Tokyo contributed to this report.