EU sees major success in Trump trade talks

BRUSSELS (Reuters) - European Commission President Jean-Claude Juncker’s deal on Wednesday to end U.S. President Donald Trump’s threat of new tariffs was hailed as a major success by EU officials and other European governments.

U.S. President Donald Trump and President of the European Commission Jean-Claude Juncker speak about trade relations in the Rose Garden of the White House in Washington, U.S., July 25, 2018. REUTERS/Joshua Roberts

“Breakthrough achieved that can avoid trade war and save millions of jobs! Great for global economy!” tweeted German Chancellor Angela Merkel’s Economy Minister Peter Altmaier as news of the Washington deal broke late in the evening in Europe.

“This is a big day for the Commission, it’s a big day for Juncker,” a senior EU official said. “The imminent sanctions and everything that could have happened unilaterally ... is off now.

“We have a system engaging them in dialogue, not confrontationally,” the official added. “For as long as the dialogue continues we can make this win-win.”

Brussels had been playing down expectations before the meeting that the EU chief executive could dissuade Trump from imposing new tariffs on European - notably German - cars.

The plan had been to lay out a threat of EU retaliation on U.S. goods that the EU said could wipe $50 billion off U.S. national income in the coming years while also renewing offers of resuming talks on lowering barriers to transatlantic trade.

In the end, Trump agreed to resolve arguments over the steel and aluminum tariffs he introduced to European dismay earlier this year, to scrap any other planned penalties and to join in a dialogue with Brussels on enhancing trade. The EU will work to ease U.S. imports, including soybeans and natural gas.

The EU official said Trump’s agreement came as something of a surprise to the European delegation, but the U.S. president appeared to have appreciated the risk of a further trade war.

“We were surprised but I think that they also saw that the potential of a deal would be much more than the cost of retaliation,” the official said. “I think they weighed what it would mean to open up a 50-billion-euro trade nightmare.”

“Any potential threat ... is off the table. And we have a process now and they are hooked into the process.”

Another Merkel ally, the center-right leader in the European Parliament Manfred Weber, tweeted: “Once again it is clear this evening -- Europe is strong when it acts with determination.”

Earlier this month, while Trump stirred new consternation in Europe with criticism of Germany and others during a NATO summit in Brussels, Juncker faced questions, notably in Germany, over his fitness to negotiate for the EU as he appeared unwell.

He dismissed suggestions he was drunk, blaming sciatica. The apparent success of his talks in Washington is certain to be portrayed by the Commission as proof that the EU executive is capable of defending the interests of the 28 member states.

Reporting by Alastair Macdonald ; @macdonaldrtr; editing by Philip Blenkinsop and James Dalgleish