Donald Trump has hailed a "very big day for free and fair trade" after reaching a deal to avert a full-blown trade war with the EU.
Following talks with European Commission President Jean-Claude Juncker at the White House, Mr Trump said the US and EU had agreed to work to resolve their current dispute.
Last month, the US president slapped tariffs on steel and aluminium imports, prompting tit-for-tat measures by Brussels, including tariffs on bourbon whiskey, Levi's jeans and Harley-Davidson motorbikes.
Subsequently, Mr Trump had warned of retaliatory action on EU carmakers.
In a bid to de-escalate the quarrel, Mr Trump said he and Mr Juncker had agreed on Wednesday to "work together toward zero tariffs, zero non-tariff barriers, and zero subsidies" on non-car goods.
The US president said: "This was a very big day for free and fair trade, a very big day indeed."
Mr Trump added the US and EU were "starting the negotiation right now but we know very much where it's going", as he outlined an agreement to work to reduce barriers and increase trade in services, chemicals, pharmaceuticals and medical products.
The US president also declared the EU had agreed to buy "a lot of soybeans" and increase its imports of liquefied natural gas from America.
Appearing alongside Mr Trump at a news conference, Mr Juncker said as long as US-EU negotiations were ongoing the EU would "hold off further tariffs" on American goods.
Mr Juncker added he had travelled to Washington with "the intention to make a deal today and we made a deal today".
He also pledged action to work with the US to reform the World Trade Organisation, which Mr Trump has routinely criticised as being unfair to America.
Germany's economy minister Peter Altmaier immediately hailed news of the agreement, posting on Twitter: "Breakthrough achieved that can avoid trade war and save millions of jobs! Great for global economy!"
American stock markets jumped in their last half-hour of trading in response to reports of a US-EU agreement.
Mr Juncker had earlier told Mr Trump the EU and US, which share a $1tr bilateral trade relationship, are "allies, not enemies" as he urged an easing of tensions.
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Following his White House talks, and after his news conference with Mr Trump, Mr Juncker claimed a "major concession" from the US president was a promise not to increase tariffs on cars and auto parts during negotiations.
Their meeting came after the US president's recent turbulent tour of Europe, in which he attacked Germany and other NATO nations, challenged Prime Minister Theresa May's Brexit strategy, and drew wide criticism for his comments following a meeting with Russia's Vladimir Putin.