Republicans and farmers alarmed as Trump trade wars grow

US President Donald J. Trump speaks at the Granite City Works steel plant in Granite City Illinois USA 26 July 2018

US President Donald J. Trump speaks at the Granite City Works steel plant in Granite City Illinois USA 26 July 2018

Donald Trump issued a fresh threat to the EU hours before a meeting with Jean-Claude Juncker at the White House, where the European commission president is to make a last-ditch effort to avert a transatlantic trade war.

It's widely believed that the trade war is not aimed to reduce the US's trade deficit with Chinabut to hinder the Made in China 2025 program that would challenge the US's leading position in technology.

The tweet from Donald Trump that followed his meeting with European Commission President Jean-Claude Juncker was benevolent in tone, unlike after the G7 summit or the latest North Atlantic Treaty Organisation meeting.

"I think the statements on the European Union increasing purchases of soybeans from the United States are largely symbolic", he added.

Take soybeans, hailed as a headline victory for the US.

Republican senator Ron Johnson voiced the views of free traders in Trump's party, saying: "This is becoming more and more like a Soviet-type of economy here: commissars deciding who's going to be granted waivers, commissars in the administration figuring out how they're going to sprinkle around benefits".

More importantly, the "zero tariff" deal is without details.

"Don't believe the crap you see from these people - the fake news", Trump said.

USDA to provide $12bn to US farmers in response to tariffs

The two leaders also said they would work toward "zero" tariffs on industrial goods, according to Mr Trump.

Facing hard congressional elections later this year, Trump traveled to the farm state of Iowa to promote an apparent trade truce with the European Union. "And the European Union is going to start, nearly immediately, to buy a lot of soybeans", Trump told reporters after the meeting.

At a meeting in Washington on Wednesday, Juncker and Trump agreed the United States would hold back on threats to apply tariffs on the auto sector as the two sides conduct negotiations. Last week, Trump said he was ready to impose a "tremendous retribution" against the EU.

"We are grateful for the administration's recognition that farmers and ranchers needed positive news now and this will buy us some time", Duval said.

Trump says a 10% tax on imports of cars to the European Union is too high compared to the 2.5% rate charged by the USA, and he's also been critical of the European Union over its US$150 billion (RM609 billion) trade surplus with the US. At the Group of Seven summit in Quebec, Trump was roundly criticized for publicly berating allies over their trade practices and provoking a needless trade war.

"It is not the European Commission that buys, but the industry, and traders who look for goods where they are the least expensive for their financial interests", one European soybean trader said.

For his own part, Juncker tweeted Wednesday, "I came for a deal, we made a deal". Trump's strategy to get them to drop these protectionist barriers is to impose crushing tariffs.

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