The United States and the European Union (EU) appeared to take a step back from an escalating trade war on Wednesday, with each pledging to negotiate a bilateral trade deal that would eliminate tariffs on steel and aluminum, among other things, and for Europe to build additional liquefied natural gas (LNG) import terminals, allowing member countries to purchase more U.S. gas.

At a joint press conference at the White House Rose Garden with European Commission President Jean-Claude Juncker, President Trump called for "a new phase in the relationship between the United States and the European Union -- a phase of close friendship; of strong trade relations in which both of us will win."

Trump said he and Juncker had agreed "to work together toward zero tariffs," later adding that the two sides "will resolve the steel and aluminum tariff issues, and we will resolve retaliatory tariffs.  We have some tariffs that are retaliatory, and that will get resolved as part of what we're doing."

On LNG, Trump said the EU "wants to import more LNG from the United States, and they're going to be a very, very big buyer. We're going to make it much easier for them, but they're going to be a massive buyer of LNG, so they'll be able to diversify their energy supply, which they want very much to do. And we have plenty of it."

Juncker echoed Trump's conciliatory tone and comments. "We have identified a number of areas on which to work together," he said, including to "work toward zero tariffs on industrial goods. That was my main intention, to propose to come down to zero tariffs on industrial goods."

The United States and the 28-member EU nations are to begin negotiations over a bilateral trade deal, Juncker said. Escalating tensions over trade could be reduced "on the understanding that as long as we are negotiating, unless one party would stop the negotiations, we will hold off further tariffs, and we will reassess existing tariffs on steel and aluminum."

Juncker said both sides "decided to strengthen our cooperation on energy. The EU will build more terminals to import LNG from the U.S." And in what may be a veiled swipe at Russia, which supplies much of the continent with natural gas via pipelines, the European leader added "this is also a message for others."

According to the U.S. Energy Information Administration, nearly 90% of Russia's 7.5 Tcf in natural gas exports went to Europe via pipeline in 2016, the most recent year for statistics. Russia's customers included EU members Germany (1.7 Tcf), Italy (0.7 Tcf), the UK (0.6 Tcf) and France (0.4 Tcf), as well as Austria, the Czech Republic, Hungary and Poland, which each received 0.2 Tcf.

The issue of Europe's dependence on Russia for energy supplies is a sensitive one. After Russia invaded and annexed Crimea in 2014, the United States and its allies sanctioned some Russian energy companies and executives. The sanctions, coupled with burgeoning U.S. gas supplies, have opened the door to more LNG imports to the continent.

The oil and gas industry welcomed the news on LNG trade. "The U.S. has already exported 28 cargoes totaling 86 Bcf of natural gas to members of the EU and will look to build on that success," said Center for Liquefied Natural Gas Executive Director Charlie Riedl. "The national security benefits of allies and partners in the EU diversifying their energy portfolios with American LNG are real and can help provide stability and certainty abroad."

American Petroleum Institute spokesman Michael Tadeo concurred. "We welcome the president's strong comments...on the importance of U.S. natural gas exports and look forward to details of the U.S.-EU agreement. Adoption of policies as part of this agreement is essential to deliver U.S. natural gas benefits to EU allies and enhance energy security."

While the EU may in time build more receiving terminals, U.S. LNG exporters shouldn’t be looking for a “massive” business boost anytime soon. According to NGI's recent 24-page report, “Navigating LNG Through a Choppy Trade Sea,” China, Japan and other Asian markets are the biggest prospects for LNG sales. Europe has some LNG terminals and could build more, but its energy market is mainly supplied by Russia via natural gas pipelines. NGI subscribers can access the report free. Others may purchase it here.