RACHEL MARTIN, HOST:
"It's not an actual deal yet, but it's a step away from the edge of the cliff," quote. That is how the chief economist at a German bank described the trade detente between the U.S. and the EU. President Trump and the head of the European Commission, Jean-Claude Juncker, met yesterday at the White House. Here's President Trump speaking in the Rose Garden after that meeting.
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PRESIDENT DONALD TRUMP: We agreed today, first of all, to work together towards zero tariffs, zero non-tariff barriers and zero subsidies on non-auto industrial goods.
MARTIN: We are joined now by the EU ambassador to the U.S., David O'Sullivan, who has been privy to those discussions. Ambassador, welcome to the program.
DAVID O'SULLIVAN: Good morning. Thank you.
MARTIN: Has a trade war between the U.S. and the EU been averted at this point?
O'SULLIVAN: Well, I think we have managed to move from what could've been a negative feedback loop to a positive feedback loop. We have averted the risk of additional escalation of the trade tensions between us, and, I think, set out a very positive agenda on which we will now work in in the coming weeks.
And the big takeaway to me was the very warm relationship between President Trump and President Juncker. And the two men struck up a good relationship, which I think was what enabled this breakthrough yesterday, yes.
MARTIN: One of the big facets of this agreement was that the EU agreed to buy more American soybeans and natural gas, eventually - down the line - in exchange for what? What does Europe get out of that, especially the natural gas, which is going to be really expensive and complicated to import from across the Atlantic?
O'SULLIVAN: Well, I think these are ultimately commercial decisions. The European Union as such doesn't purchase these commodities, nor even our member states. We're in market economies, so it's consumers and it's companies that will buy them.
I think, on both points, the issues are the following. On the natural gas, it has long been the policy of the European Union and the European Commission, led by President Juncker, to want to diversify our source of energy for the European Union. We have an excessive dependence on one particular supplier, namely Russia. So we have been putting in place pipelines, terminals to enable us to import gas from other sources. And the United States is potentially a very positive source of that. And we will continue to put that infrastructure in place and to make it more commercially interesting for those exports to take place.
In the case of soya, we're already big importers of soya. But it is true that the recent trade tensions with China mean that China is purchasing less from the U.S., more from other sources of soya. And therefore, European Union farmers are quite likely to buy much more from the United States. So these are the positives which we were able to inject into these discussions yesterday.
MARTIN: But President Trump didn't promise to lift the tariffs on steel and aluminum.
O'SULLIVAN: No. On that, we've agreed to disagree. He has - we have the American tariffs on steel and aluminum, but we have our rebalancing tariffs on other products. Those will remain in place. But as you see in the statement, we have agreed, during the next few weeks, to discuss how we could potentially also resolve that issue.
MARTIN: The Trump administration has appeared to make peace before, in particular with China, in that trade dispute. And then it only flares up again when the president changes his mind about the potential for a deal. Are you concerned that the same could happen here?
O'SULLIVAN: In all trade relations, nothing is agreed until everything is agreed. And this is an agreement to take the work forward. And, of course, there's always the possibility that we will fail to find agreement in the future.
But I think what is really encouraging out of these discussions is the positive atmosphere, the sense of trust between the two principals and the fact that we do actually have a very constructive and positive agenda on how to grow trade between the United States and the European Union. And that's what we'll be focusing on.
MARTIN: Do you have concerns that, ultimately, President Trump is concerned more about the surplus that the EU runs with the U.S.?
O'SULLIVAN: Well, I think this is something which concerns the president. Of course, you know our perspective, which is that trade deficits and surpluses frequently are more the product of macroeconomic factors, such as the American propensity to consume much more than you save. But I think the common agenda is how we can grow and increase trade between us, which will mean increasing American exports, as well as European trade with the United States.
MARTIN: Just weeks ago, President Trump called Europe a foe of America when it comes to trade, which is extraordinary in one of America's most important alliances. Are you convinced that is no longer the case?
O'SULLIVAN: Well, I think when the president used that term, he then went on to say, really, he meant an economic competitor. So I think it was not intended in quite the way it might have been interpreted.
I think yesterday, President Juncker and President Trump were able to reach a positive dynamic of mutual understanding that there are huge potentials for increasing economic activity between the United States and the European Union, both in terms of trade and investment. And that's what they've mandated now their colleagues to work on with this working group, which will come together in the next few weeks. And I think we have identified a number of very positive areas where we can make progress.
MARTIN: David O'Sullivan, EU ambassador to the U.S., thanks for your time this morning.
O'SULLIVAN: Thank you very much. Transcript provided by NPR, Copyright NPR.