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EU wins exemption from planned U.S. auto tariffs

U.S. President Donald Trump meets with European Commission president Jean-Claude Juncker in the Oval Office of the White House, on July 25, 2018, in Washington. (AP Photo/Evan Vucci)

WASHINGTON (Kyodo) -- The United States and the European Union agreed Wednesday to hold off on new tariffs, suggesting Washington will exempt the 28-nation bloc from a controversial plan to impose stiff duties on car and parts imports.

The agreement came as U.S. President Donald Trump is considering slapping additional tariffs of up to 25 percent on imported cars and parts. If invoked, the new duties would affect major car exporters such as Germany and Japan.

"As long as we are negotiating, unless one party would stop the negotiations, we will hold off further tariffs," European Commission President Jean-Claude Juncker said at a news conference with Trump after a meeting at the White House.

In the meeting, Trump and Juncker pledged to work toward eliminating all tariffs, nontariff trade barriers and subsidies on nonautomobile industrial goods.

The European Union also agreed to buy more soybeans and liquefied natural gas from the United States to ensure what Washington calls a "reciprocal" trade relationship between the two economies, which account for half the world's trade.

The two sides agreed to resolve issues related to the U.S. imposition of duties on steel and aluminum imports from the European Union and retaliatory tariffs by Brussels on U.S. agricultural and other products.

Japan will study the results of the Trump-Juncker meeting ahead of an inaugural round of Japan-U.S. trade ministerial talks expected to take place in August in Washington, hoping that Tokyo will be similarly exempted from the envisaged auto tariffs should the Trump administration invoke them.

Trump has criticized the U.S. trade deficit with European countries, calling the European Union a "big abuser" of trade relations.

The European Union charges a 10 percent tariff on imports of American automobiles, and the United States has a 2.5 percent tariff on European passenger cars.

EU Trade Commissioner Cecilia Malmstrom had warned she was crafting a $20 billion list of American goods to hit with retaliatory tariffs if Trump imposed the new levies on cars imported from the European Union.

Aside from nonautomobile industrial goods, the United States and the European Union will work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products, as well as soybeans, according to a joint statement issued after the meeting.

"The European Union is going to start, almost immediately, to buy a lot of soybeans," Trump said. "Buy a lot of soybeans from our farmers in the Midwest, primarily."

The president also said the European Union will become "a very big buyer" of LNG from the United States, so the bloc will be able to diversify its energy supply.

Trump said he and Juncker launched a new phase of "strong trade relations in which both of us will win."

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