European Commission president Jean-Claude Juncker and US president Donald Trump set out their new relations after more than two hours of talks at the White House in Washington.

Trump hailed the talks as “a very strong understanding” and said that the “new phase in the relationship” between the two blocs marked a “very big day for free and fair trade”.

The announcement came in the midst of global tensions after the Trump administration imposed tariffs of 25% on steel and 10% on aluminium, fuelling a full-blown trade war.

Since the tariffs were announced in March, countries around the world, including Canada and China, have shot back by imposing tariffs on US goods. The EU also imposed tariffs on billions of euros worth of US products.

But after the talks, Trump’s threat to impose tariffs on European cars was pushed aside and the EU said it would buy more US liquefied natural gas and soybeans.

The steel and aluminium tariffs, however, remain in place.

Juncker and Trump pledged to launch expert working groups to facilitate trade and lower barriers and said they would work together to reform the World Trade Organization’s rules.

A joint statement issued after the visit acknowledged that the US and EU already have a $1 trillion bilateral trade relationship, which is one of the largest in the world.

“This is why we agreed today, first of all, to work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods,” it stated.

“We will also work to reduce barriers and increase trade in services, chemicals, pharmaceuticals, medical products, as well as soybeans.”

Earlier this week, Juncker called on China to ease trade tensions and said it could open up its economy further, as the Asian country had threatened to impose new tariffs on the US.