US President Donald Trump and European Commission chief Jean-Claude Juncker have agreed to launch negotiations to cut trade barriers, easing the threat of a transatlantic trade war.

Mr Trump and Mr Juncker said the talks would also seek to "resolve" US tariffs on steel and aluminum and Europe’s retaliatory duties - marking a step back from the President's signature import protections for American metals producers.

He said Europe has agreed to increase purchases of US liquefied natural gas and lower trade barriers to American soybeans, american farmers and the energy sector.

"Soybeans is a big deal. And the European Union is going to start, almost immediately, to buy a lot of soybeans," Mr Trump told reporters after the meeting.

He later tweeted that work on documents was "moving along quickly," adding that the meeting with Mr Juncker had "great warmth."

Mr Trump wrote: "A breakthrough has been quickly made that nobody thought possible!", marking a turnaround from 15 July, when he called the 28-nation European Union a "foe" on trade.

Mr Juncker said the two sides agreed that as long as they were negotiating on trade, they would hold off on further tariffs, including potential US tariffs on cars and auto parts.