By Emre Peker and Valentina Pop 

BRUSSELS -- European Union leaders welcomed signals Thursday that the Trump administration would sign off on temporary waivers from steel and aluminum tariffs, averting a trans-Atlantic trade war, for now.

"Only reasonable that EU seems to be omitted from tariffs based on national security grounds given that EU and US are close allies," tweeted Danish Prime Minister Lars Lokke Rasmussen during a meeting of EU leaders in Brussels. .

U.S. Trade Representative Robert Lighthizer told the Senate on Thursday that the tariffs, which take effect Friday, will be "paused" for the EU, Australia, Argentina, Brazil and South Korea.

Seeking to counter the global glut driven by Chinese overcapacity, President Donald Trump has cited national security as the justification for imposing the import tariffs -- 25% on steel and 10% on aluminum.

"Many countries are calling to negotiate better trade deals because they don't want to pay the steel and aluminum tariffs," Mr. Trump said as unveiled $50 billion in tariffs targeting China in a separate set of trade measures--and ahead of his expected waiver for the EU. "We're just starting a negotiation with the European Union, because they're really shut out our country."

The exemptions for the EU come after intense European lobbying to avoid an escalating trade spat between the longstanding allies. European Trade Commissioner Cecilia Malmstrom rushed to Washington this week to secure a waiver in meetings with counterparts, including Mr. Lighthizer and Commerce Secretary Wilbur Ross.

EU officials pointed out, however, that the temporary exemption prolongs uncertainties in the trans-Atlantic relationship.

"There still is one point we need to clarify -- is the exemption conditional and if so what are these conditions," Belgian Prime Minister Charles Michel said. "We have to see how it's formulated. The devil is sometimes in the details."

In exchange for a waiver, EU officials have committed to establishing a working group with the U.S. that would explore ways to address bilateral trade tensions.

Mr. Trump has repeatedly singled out Germany's trade surplus with the U.S. and threatened levies against European cars. The U.S. has blocked access for agricultural products from some EU members for years, Ms. Malmstrom said, citing it as an "irritant" that the bloc would like to discuss with Washington. EU officials didn't elaborate on U.S. demands.

"We are not negotiating under threat," Ms. Malmstrom said. "But we are always willing to talk about issues of common concern."

Some European capitals signaled an openness to fix trade disputes with the U.S. An official in Berlin warned that while the immediate tariffs threat could be skirted, Mr. Trump hold the issue like the "sword of Damocles" over the EU.

An adviser to French President Emmanuel Macron said Thursday that the EU would actively combat Chinese overcapacity with the U.S. and consider addressing other trade issues.

"Working on one-off subjects in bilateral EU-U.S. relations is a possibility," the French adviser said.

But European officials broadly cautioned against entering into a comprehensive negotiation or effort to revive the effectively frozen Trans-Atlantic Trade and Investment Partnership talks between Washington and Brussels.

The U.S. and the European Union already impose relatively low tariffs, and trade between them has soared, though the Trump administration blames some EU duties for increasing the U.S. trade deficit.

EU leaders delayed their discussion on the bloc's trade policy during the summit, as they awaited confirmation from Washington that the EU will be exempt.

"As long as we have it, we are relieved," said a senior EU official, who was in the room where EU leaders met Thursday for a two-day summit.

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Bojan Pancevski

in Berlin and Will Horobin in Brussels contributed to this article.

Write to Emre Peker at emre.peker@wsj.com and Valentina Pop at valentina.pop@wsj.com

(END) Dow Jones Newswires

March 22, 2018 18:35 ET (22:35 GMT)