Trump makes peace with EU; reaches deal to de-escalate trade war

Washington, July 26: US President Donald Trump and president of the European Commission Jean-Claude Juncker on Wednesday, July 25, agreed to defuse the escalating trade tension between the trans-Atlantic allies.

The development was deemed positive with Germany calling the agreement as a "breakthrough" which "can avoid trade war", AFP reported. Germany was apprehensive with the US's threat to impose tariffs on automobiles that would hurt the European car-maker's industry.

Trump and Juncker spoke for over two hours at the White House and said they would work towards resolving the prevalent duties on steel and aluminium imposed by Washington, which led to a serious dispute between the US and its key allies, including the European Union.

Trump, whose 'America First' ideology has seen the US crossing swords with a number of economies, foes as well as friends, said in a statement that efforts were on to strengthen trade relationship to the benefits of citizens on both sides of the Atlantic.

He said they agreed to "launch a new phase" in their relationship and "to work towards zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods".

The EU, on the other hand, committed itself to buy US soybeans and natural gas.

Trump also praised on Twitter the "breakthrough" that was made unthinkably quicker. "Great to be back on track with the European Union. This was a big day for free and fair trade!" he said in his Twitter post.

Juncker, who sounded defiant ahead of the meeting, later said that he intended to make the deal the same day and it was done.

Trump recently said on the soil of Europe that EU is a "foe" to the US in terms of what they do to his country in trade.