Trump relents on EU car prices, as U.S.-China fight derails Qualcomm deal

WASHINGTON (Reuters) – In what the EU chief called a "major concession," US President Donald Trump agreed on Wednesday transatlantic trade war.

After a meeting at the White House, Trump and European Commission President Jean-Claude Juncker said the talks would also seek to "resolve" US tariffs on steel and aluminum and Europe's retaliatory duties – marking a step back from Trump's signature import protections for American metals producers.

The breakthrough came as the bitter trade dispute between the United States and China appeared with a major casualty, with China not approving US chipmaker Qualcomm Inc. ( QCOM.O ) takeover of NXP Semiconductors ( ] NXPI.O ), likely shutting the door on the $ 44 billion deal.

Qualcomm needed Beijing's okay because China accounts for nearly two-thirds of its revenue, but a deadline at midday on Thursday in Asia passed to China's regulator. Qualcomm had said on Wednesday it was dropping the bid.

Trump said Europe agreed to increase purchases of U.S. liquefied natural gas and lower trade barriers to American soybeans, aiding U.S. farmers and the energy sector.

"Soybeans is a big deal. And the European Union is going to start, almost immediately, to buy a lot of soybeans, "Trump told reporters after the meeting.

Trump later tweeted that work on documents was "moving along quickly," adding that the meeting with Juncker had "great warmth."

"A breakthrough has been made so quickly that nobody thought possible!" Trump wrote, marking a turnaround from July 15, when he called the 28-nation European Union "foe" on trade.

Juncker said that they were negotiating on trade, they would hold off on further tariffs, including potential U.S. tariffs on cars and auto parts.

He later told reporters that it was a "major concession" on Trump's part that he expected the U.S. president to follow through on it.

U.S. Juncker added: "It is the first time that the Americans agreed to reassess the measure that they have taken in the steel and aluminum. sector. "

European governments and EU officials hailed the Trump-Juncker agreement as a major success.

"Breakthrough achieved that can save millions of jobs! Great for global economy, "tweeted German Chancellor Angela Merkel's economy minister, Peter Altmaier.

DEAL BUOYS STOCKS

The late-afternoon news that the meeting had eased transatlantic trade voltages fed a powerful late rally on Wall Street.

U.S. Highs of the day, with the benchmark S & P 500 Index .SPX rising by the most in nearly two months to close the day within 1 percent of an all-time high. The dollar .DXY fell, led by a surge in the euro EUR =, which has been pressured by the deteriorating trade relations with the EU's largest trading partner.

U.S. 10th anniversary of US10YT = RR ended the day at 2.98 percent. Steelmakers' shares fell, with United States Steel ( X.N ) falling more than 5 percent in extended trading, and AK Steel Holdings ( AKS.N ) sliding 2 percent.

The Alliance of Automobile Manufacturers, a trade group representing both domestic and foreign-brand automakers, welcomed the agreement to hold talks instead of imposing tariffs, saying the announcement not increasing tariffs. "

ZERO INDUSTRIAL GOODS TARIFFS

Trump and Juncker said the US-EU talks would seek to price, trade barriers and subsidies for non-automotive industrial goods and services, pharmaceuticals and medical products.

They also said they would cooperate to reform the rules of the World Trade Organization, which the Trump administration frequently criticizes for favoring U.S. trading partners.

Trump's threat to impose tariffs on auto imports on national security grounds would hit European carmakers BMW ( BMWG.DE ) Daimler ( DAIGn.DE ) and Volkswagen ( VOWG_p .DE ) Japanese and South Korean car companies.

The Commerce Department could recommend an early warning to U.S. national security.

The two leaders did not specifically mention rates in their statements, keeping the focus on other industrial products.

SOYBEAN PRESSURES

An official of the United States of America.

U.S. Farmers have been hurt by China's retaliatory tariffs on American soybeans amid an escalating trade between Washington and Beijing, and Trump has been promising relief. On Tuesday, his administration said it would use a program to pay farmers up to $ 12 billion, easing the bread for a politically important Trump constituency.

Juncker said the United States has agreed to increase its exports to Europe.

"They're going to be a massive buyer of LNG, so they'll be able to diversify their energy supply," Trump said of Europe. "And we have plenty of it."