Carmakers Surge After Trump Agrees to Put Car Tariffs on Hold (Source Bloomberg)

European carmakers climbed after President Donald Trump backed off his threat to levy tariffs on cars imported to the U.S. during a meeting with European Commission President Jean-Claude Juncker, averting for the time being an escalating trade war.

Shares of BMW AG, Volkswagen AG, Fiat Chrysler Automobiles NV and Daimler AG jumped on Thursday following a pledge from the two leaders to “hold off on other tariffs” while they negotiate a deal to expand European imports of U.S. liquefied natural gas and soybeans and lower industrial levies. Germany’s VDA auto industry association called the meeting “a big step forward” and “good news for industry and consumers on both sides of the Atlantic.”

The two met Wednesday at the White House with Trump warning that he would move forward with 25 percent tariffs on auto imports if the meeting with Juncker didn’t go well, prompting the EU to respond that such a move would bring significant retaliatory measures on U.S. goods. The breakthrough came after about three hours of talks, leading to their impromptu announcement in the Rose Garden.

“We had a big day, very big,” Trump said during a press conference with Juncker. “We are starting the negotiation right now, but we know where it is going.” Trump hailed “a new phase” of trade relations.