President Donald Trump said Wednesday he and European Commission President Jean-Claude Juncker have agreed to new talks on the possibility of eliminating trade barriers altogether, between the United States and Europe.

Calling it “a new phase” in U.S.-European relations on trade and other issues, Trump said both sides would work on a deal "toward zero tariffs, zero non-tariff barriers and zero subsidies on non-auto industrial goods."

Trump and Juncker appeared amiable, at a meeting aimed at averting a  trade war.

Trump told reporters:  "We agree today, first of all, to work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods.”

The statement came after Trump had threatened tariffs on car imports and reports that the EU is planning retaliatory measures.

Trump said the US and EU will set up an executive working group to work on trade and assess existing tariffs “to the betterment of both”. He added: “We’re starting the negotiation right now but we know very much where it’s going.”

Juncker said it his “intention to make a deal” that would work towards zero tariffs on industrial goods.

Trump added: “This was a very big day for free and fair trade, a very big day indeed.”