{UAH} A semi-truce”: Trump makes an EU deal to avoid a trade war

But one big question remains: Can the US and the EU actually agree to some sort of bigger trade deal after this first step?

By Alex Ward@AlexWardVoxalex.ward@vox.com Jul 25, 2018, 6:00pm EDT

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President Donald Trump and European Commission President Jean-Claude Juncker announce a trade deal at the White House on July 25, 2018. Win McNamee/Getty Images

President Donald Trump and European Commission President Jean-Claude Juncker have just pulled the US and the European Union back from the brink of a full-blown trade war.

Following a meeting at the White House on Wednesday, Trump and Juncker, who heads the EU, held an unexpected press conference in the Rose Garden to announce the broad outlines of an agreementdesigned to avert what many saw as a looming trade war. 

Here's what they agreed to:

• The European Union will import billions of dollars more in US soybeans and liquefied natural gas, which will also help Europe somewhat move away from its reliance on Russian energy.
• Both sides will work together toward zero tariffs and other economic barriers on non-auto industrial goods.
• The US for now won't place a 25 percent tariff on European cars coming into the United States — something Trump had previously threatened to do.
• They would also stop any future tariffs while they continue to negotiate over Trump's steel and aluminum tariffsplaced last May.

Both leaders seemed pleased with the deal. Trump dubbed it a "new phase" of relations between the two trading partners. "We had a big day. Very big," he said.

"This is a semi-truce"

Trade negotiations between the two leaders could've gone a lot worse, as some European leaders had been calling for Juncker to take a hard line against Trump

We refuse to negotiate with a gun to the head," French Finance Minister Bruno Le Maire told France24 on Saturday, just four days before Juncker's visit. "It must be the US that takes the first step to de-escalate."

But Marie Kasperek, a US-EU trade expert at the Atlantic Council think tank, told me that this agreement allowed both sides to walk away with improved economic ties while avoiding the worst — and it could possibly help repair the relationship down the line. "This is a semi-truce with plans to build an actual truce," she said.

But one big question remains: Can the US and EU actually agree to some sort of bigger trade deal after this first step?

Kasperek said that's unlikely, as the EU probably won't seriously engage in trade negotiations until Trump removes the steel and aluminum tariffs, which he has shown little desire to do so far. Some European politicians hoped Juncker would extract a hard commitment from Trump on that issue

But for now, both sides can part with a win for each: The US gets immediate benefits from increased soybean and energy exports, and the EU leaves with no new tariffs on the table. Not bad for an impromptu press conference

But for now, both sides can part with a win for each: The US gets immediate benefits from increased soybean and energy exports, and the EU leaves with no new tariffs on the table. Not bad for an impromptu press conference

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