Trade War Between US and EU Averted (For Now)

Then, on Tuesday, Trump was eager to announce the bare bones of a trade deal with European Commission President Jean-Claude Juncker that would see the E.U. importing more soybeans.

"We agreed today, first of all, to work together toward zero tariffs, zero nontariff barriers and zero subsidies on non-auto industrial goods", he said at an unscheduled appearance with Juncker after their White House meeting.

Trump promised the United States would not impose tariffs on the import of European cars, something the USA had threatened to do in retaliation to taxes imposed on certain American goods entering Europe following Trump's decision to levy extra taxes on imported aluminium and steel.

Trump also said the European Union had agreed to buy "a lot of soybeans" and increase its imports of liquefied natural gas from the U.S.

He said this was a "short-term" solution to help farmers and give President Donald Trump time to negotiate a longer term trade deal to help agriculture and other sectors hurt by unfair trading practices by China and others. Commerce Department data show the USA trade gap with China was $335.7 billion a year ago - by far the biggest imbalance with any trading partner but a figure smaller than the one cited by the President.

"I think we have to talk each to another and not at another and that's what we do today", he said, before saying he hopes they could focus on reducing, not increasing, tariffs. As a result, USA wheat exports to Mexico fell 38 percent in the first five months of this year, according to Reuters.

Both Juncker and Trump's comments on more USA -sourced LNG heading into Europe will have major geopolitical ramifications in both the European Union and even Russian Federation.

Juncker said the United States had agreed to build more LNG export terminals to increase supplies to Europe.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 24, 2018.

President Donald Trump slammed critics from within his own party for "weakness" after a number of Republicans vented about a new $12 billion package to aid farmers who are suffering from new foreign tariffs in an escalating trade war.

The two leaders diffused what had threatened to become a trade war between the two blocs, fuelled by tariffs set by Mr Trump on European steel and aluminium exports, and threats to expand the tariffs to cars. But others were wary, wondering whether it's realistic to expect Europe to buy more soybeans from the United States, as Juncker signaled, or to become "a massive buyer" of USA liquefied natural gas, as Trump declared. "Farmers need contracts, not compensation, so they can create stability and plan for the future", said the group's executive director, Brian Kuehl.

"It will make trade fairer and more reciprocal", Trump said. The same official said that agricultural products were outside the talks between Juncker and Trump, directly contradicting comments from Commerce Secretary Wilbur Ross, who said Tuesday that "all agricultural products are something that will be discussed".

In saying the European Union would import more USA gas, Juncker was able to surprise the president, two European Union officials said, by telling him it was US bureaucracy over export licenses that was partly holding back sales. 'This is what we feared all along: that this would just turn into more aid programs'.

He has also threatened to slap tariffs on imported cars, trucks and auto parts, potentially targeting imports that previous year totalled £254 billion.

Mary Lovely, a Syracuse University economist who studies trade, said, "The Chinese are not going to be buying our soybeans, so nearly by musical chairs our soybeans are going to Europe".