Trump, Juncker pull back from US-EU trade war
SHARES OF BMW, VOLKSWAGEN, FIAT CHRYSLER AND DAIMLER SOAR AFTER TALKS
European carmakers surged after President Donald Trump and European Commission President JeanClaude Juncker agreed to declare a ceasefire in their trade spat while they negotiate lower barriers to transatlantic commerce.
Shares of BMW AG, Volkswagen AG, Fiat Chrysler Automobiles NV and Daimler AG jumped yesterday following a pledge from the two leaders to hold off on other tariffs while they negotiate a deal to expand European imports of US liquefied natural gas and soybeans and lower industrial tariffs.
In the biggest sign yet that a major trading partner can convince the US to back away from a trade war, Juncker also said they would re-examine US steel and aluminium tariffs and the retaliatory duties imposed by the EU.
“We had a big day, very big,” Trump said during a press conference with Juncker at the White House on Wednesday. “We are starting the negotiation right now, but we know where it is going.” Trump hailed a new phase of trade relations.
The deal eases tensions stoked by Trump’s threat to impose new tariffs on car imports. BMW climbed as much as 5.5 per cent yesterday and was up 2.7 per cent in Frankfurt as of 9:31am. Volkswagen was 3.6 per cent higher and Daimler up 0.4 per cent. Fiat traded 4.7 per cent higher in Milan.
Auto tariffs
Trump warned at a cabinet meeting last week that he would move forward with 25 per cent auto tariffs if the meeting with Juncker didn’t go well. Trump could impose car tariffs on national security grounds once Commerce Secretary Wilbur Ross completes a required investigation, which could come anytime before a deadline by early next year.
Auto tariffs at the level Trump has threatened would add about €10,000 (Dh43,025, $11,700) to the sticker price of a European-built car sold in the US, ■
Rise in BMW shares after TrumpJunker meeting
according a European Commission assessment obtained by Bloomberg News last month. That would cut US imports of European cars and car parts in half, the commission forecast.
Trump on Wednesday said they would try to resolve steel and aluminium tariffs he imposed earlier this year and retaliatory duties the EU levied in response. The US and EU also will work together to reform the World Trade Organisation and address unfair trading practices, they said in a joint statement.
Trump and Juncker took no questions after their brief remarks in the Rose Garden, an impromptu appearance scheduled after about three hours of talks.