After months of negotiating, the Trump administration and the European Union have agreed to a plan that would ease trade disputes arising from new U.S. tariffs on EU steel and aluminum, as well as bilateral restrictions on another U.S. import, automobiles.
The agreement, to be announced by European Commission President Jean-Claude Juncker and U.S. Treasury Secretary Steven Mnuchin on Thursday in Brussels, would ensure that cars and motorcycles made in the EU are not subject to U.S. tariffs of 25 percent and 10 percent, respectively. As part of the plan, the European Union will seek to lift the transatlantic tariffs on EU steel to zero and to eliminate duties on U.S. motorcycles and other goods by the end of 2019.
The agreement would avert a potential trade war between the U.S. and the EU, two of the world’s largest economies, and clear the way for the revision of the North American Free Trade Agreement (NAFTA) between the U.S., Canada and Mexico.
President Trump threatened on Twitter Monday to impose an across-the-board 25 percent tariff on EU vehicles, if talks with the European Union on a free-trade deal failed to yield the promised trade gains.