'A very big day for free and fair trade': Trump announces deal with EU to avoid full-blown trade war

Alex Brandon/AP

President Donald Trump and European Commission president Jean-Claude Juncker speak in the Rose Garden of the White House, Wednesday, July 25, 2018, in Washington

• President Donald Trump on Wednesday said he struck a deal with European Union officials to avoid a full-blown trade war, causing stocks to soar.
• The EU will import more American soybeans and natural gas, adjust regulations to help medical devices be traded more easily, and both sides will decrease industrial tariffs.
• The EU threatened to impose retaliatory tariffs on $20 billion of US goods if the talks failed.

President Donald Trump on Wednesday said he struck a preliminary deal with European Commission President Jean-Claude Juncker to ease trade tensions and avoid a full-blown trade war with the European Union.

"This was a very big day for free and fair trade," Trump said during a hastily scheduled joint appearance in the White House Rose Garden with Juncker, hailing a "new phase" of trade relations with the EU.

The Dow Jones industrial average spiked by almost 140 points after the news broke, ending the day nearly 0.7% higher.

The EU agreed to import more American soybeans and liquefied natural gas, Trump said. Both sides will work to decrease industrial tariffs and adjust regulations to allow US medical devices to be traded more easily in European markets, Trump said. He said they would work to "resolve" steel and aluminum tariffs the US imposed earlier this year.

The sides will "hold off" on other tariffs while negotiations proceed, Juncker said, amid Trump's threat of new tariffs on cars and auto parts from the EU.

"We're starting these negotiations right now, but we very much know where its going," Trump said to reporters. "We will also resolve the steel and aluminum tariff issues, and we will resolve the retaliatory tariffs."

Before the Wednesday meeting, the EU's top trade official commissioner Cecilia Malmstrom warned that if the negotiations fell through, the EU was ready to slap $20 billion worth of US goods with retaliatory tariffs.

"We will hold off on further tariffs, and reevaluate existing tariffs on steel. This was a good and constructive meeting," Juncker said at the joint conference.