USA vehicle tariffs still aren't off the table, warns German industry group

USA vehicle tariffs still aren't off the table, warns German industry group

U.S. President Donald Trump and European Commission chief Jean-Claude Juncker on Wednesday agreed on a plan to defuse the festering trade dispute between the two major economies.

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He said the administration is now focused on resolving the steel and aluminum tariffs.

Trump crowed Tuesday that his latest threat had brought Europe to the negotiating table and called on both sides to "drop all Tariffs, Barriers and Subsidies!"

He says if the United States concludes an agreement, there will be no tariffs placed on foreign-made automobiles in the EU.

They also agreed to increase trade in services and agriculture, including greater U.S. soy bean exports to the EU.

The European Commission is preparing to impose import duties on American products worth $20 billion if Washington imposes duties on vehicle imports from the EU.

Tensions between the US and the European Union over a possible automotive trade war have eased with officials agreeing to hold off on new tariffs and instead engage in talks to break down trade barriers.

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The Prime Minister said: "Many people said that immediately after the referendum, we would see a collapse in our economy".

And even if China wasn't a far bigger trade headache for Trump than the European Union, the meeting achieved little concrete for the US. Imports come mostly from Brazil and the United States, but with Chinse competition for Brazilian soybeans and lower prices in the US, European soybean traders were already expected to buy more from the American market.

Trump and Juncker took no questions after their brief remarks in the Rose Garden, an impromptu appearance scheduled after about three hours of talks.

Auto tariffs at the level Trump has threatened would add about 10,000 euros (US$11,700) to the sticker price of a European-built vehicle sold in the USA, according a European Commission assessment obtained by Bloomberg News last month.

Amid growing pressure on the United States president from business groups, lawmakers in his own party and their constituents, Malmstrom, the EU's top trade official, warned earlier on Wednesday that if the Trump administration does not back off the threat of auto tariffs, Europe will slap import taxes on US$20 billion in USA goods, primarily agricultural products.

Juncker said the European Union already imports 35 percent of its natural gas from USA producers, but will work to buy more. "We have identified a number of areas on which to work together, work towards zero tariffs on industrial goods".

While an additional 25% tariff on about US$34 billion worth of Chinese goods has been effective since early July, duties on an additional US$200 billion of Chinese goods are set to be enacted in August.

Schweitzer said European companies also faced other non-tariff barriers to doing business in the United States, for instance in winning government contracts, or due to the different regulations in various US states.