Trump courting Midwest workers after European Union trade talks

Trump says ‘drop all tariffs’ with European Union — hours after tweeting ‘tariffs are the greatest’

In what the European Union chief called a "major concession", U.S. President Donald Trump agreed on Wednesday to refrain from imposing auto tariffs while the two sides launch negotiations to cut other trade barriers, easing the threat of a transatlantic trade war.

Reaction on financial markets ranged from enthusiasm on stock exchanges to skepticism among currency investors, while commodities experts said Trump's proclamation that Europe would buy "lots of" soybeans from USA farmers hit by his trade row with China was not all that it seemed.

Mr Juncker, after Mr Trump imposed tariffs on steel and aluminium imports, said in March that "this is basically a stupid process, the fact that we have to do this". The Alliance of Automobile manufacturers, a trade group representing both domestic and foreign-brand automakers, welcomed the agreement to hold talks instead of imposing tariffs, saying the announcement "demonstrates that bilateral negotiations are a more effective approach to resolving trade barriers, not increasing tariffs".

Trump was travelling to Iowa and Illinois Thursday in which his trade agenda was expected to be a leading issue.

Chinese President Xi Jinping (shee jihn-peeng) says the world faces "a choice between cooperation and confrontation" in remarks that criticized escalating USA tariffs on goods from China and other major trading partners.

"There are no subsidies, trade taxes or quotas on soybeans in the EU", Paul Donovan, global chief economist at UBS Wealth Management in London, said in a note.

The tone was friendlier than it has been.

Trump's latest plan is to consider slapping tariffs on imported autos and auto parts - a move he says would aid American workers but that could inflate vehicle prices, make US manufacturers less competitive and draw retaliation from other nations. Wall Street is flooding into the agricultural sector on reports that the Trump administration is preparing a plan that would send billions in aid to USA farmers hurt by tariffs. But we have to do it.

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But he also cautioned that the USA is watching China's currency movements for any sign Beijing is manipulating the yuan.

The agreement was welcomed by political and business leaders in Germany, the EU's biggest economy, though their relief was tempered with caution that details have to be firmed up. "So, we're starting the negotiation right now but we know very much where it's going".

The president campaigned on a vow to get tough on trading partners he accuses of taking advantage of bad trade deals to run up huge trade surpluses with the U.S. The U.S. has imposed tariffs on the metals, again justifying the action on national-security grounds. Costs from raw materials subject to tariffs, like steel and aluminum, account for $15 million to $20 million, and the European Union tariffs add another $30 million to $35 million, according to Harley-Davidson. Other trading partners - including Canada, Japan, Mexico and South Korea - still face the threat of auto tariffs, which could land as early as September.

Russia's Gazprom PJSC, which provides more than a third of Europe's natural gas through pipelines from vast and cheap-to-operate Siberian fields, has repeatedly said USA supplies will just be "drops". The escalating trade war and tariffs on steel and aluminum had put pressure on auto company earnings. General Motors had slashed its outlook, and shares of Ford and auto parts companies had fallen.

"Our biggest exposure, our biggest unmitigated exposure, is really steel and aluminum when you look at all of the commodities", GM CEO Mary Barra said Wednesday. The reverberations would be enormous: The EU accounted for just 22 percent of US auto imports past year; Canada and Mexico combined for 47 percent.

China has counterpunched with tariffs on American products, including soybeans and pork - a shot at Trump supporters in the US heartland. The EU has been readying retaliatory taxes on USA products. So the Chinese are buying up all the Brazilian and Argentinian soybeans they can in the interim, leading to expectations that the European Union would buy more from the U.S. Still, the EU's purchases won't come close to making up for Beijing's cutback in purchases of U.S. soybeans.

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". Not to mention the $34 billion in Chinese goods the administration has so far hit with tariffs in yet another dispute over the predatory practices China deploys in a push to challenge US high-tech dominance.

It was essentially a deal to make a deal, announced in celebratory fashion during a previously unannounced appearance in the White House Rose Garden. "He was interested in my thoughts on the Kavanaugh nomination, which I think is going along nicely", McConnell said.

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