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Juncker & President Trump Agree To Trade War Ceasefire

European Commission chief  Jean-Claude Juncker and President Donald TrumpUS President Donald Trump has created controversy throughout his term in office and the arguably the biggest controversy impacting global markets is his stubborn stance on imposing massive trade tariffs on multiple regions including the European Union and China.

The EU and China have retaliated by threatening to impose their own tariffs and as a result a global trade war caused serious concerns for businesses across the world.

Things have simmered down this week as President Trump announced that the US and the EU will be working towards lowering trade barriers.

This announcement came after a meeting with the European Commission chief Jean-Claude Juncker.


EU and US Work At Defusing Tensions

The two leaders have agreed to work towards a zero-tariff trading relationship between the two regions. The deal also has them increasing trade and services between the US and EU. This agreement comes at an excellent time to diffuse some of the issues facing the world economy right now.

President Trump sparked the tension by threatening tariffs on EU steel and aluminium exports, with a further tariff on European cars. It did not help that Trump seemed to be getting close to Russian president Vladimir Putin in recent weeks, along with launching several attacks on the EU and NATO.

In a statement, President Trump said

We are starting the negotiation right now but we know very much where it's going. The EU is going to start to buy a lot more soy beans – they are a tremendous market – buy a lot of soy beans from our farmers, primarily in the Midwest.

President Trump also said that the EU would significantly boost its purchases of liquefied natural gas (LNG) going forward along with an increase in trade concerning agriculture and services.

Trump Not Thawing Stance Against China

Global markets responded well to the news that the EU and America are finally sorting out their trade differences. US stocks went up on Wednesday and S&P 500 reached 2,846.07 which is just one percent below the high that the Index recorded in January 2018.

President Trump has not given any indication that there might be room for compromise with China. To the contrary, Trump promised that the EU and the US would work with others to reform the World Trade Organization to address various issues of state-owned enterprises and intellectual property theft – two hot-button issues with China.

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