The European Union has agreed to start negotiations with the United States to head off a trade dispute threatened by U.S. President Donald Trump.

EU ministers on Monday authorised the European Commission to work with the U.S. on two deals to eliminate tariffs on industrial goods and to recognise each other's conformity assessments. The decision to launch negotiations comes after Trump threatened last year to hit the EU with punitive tariffs, especially on the export of cars mainly from Germany, because of the country's trade surplus with the U.S.

Trump threatened to impose tariffs of 20 percent on imports of German cars unless the EU struck a trade deal.

"This is a welcome decision that will help ease trade tensions," said Cecilia Malmström, the EU's trade commissioner. "We are now ready to start formal talks for these two targeted agreements that will bring tangible benefits for people and economies on both sides of the Atlantic. I am convinced that breaking down barriers to trade between us can be win-win."

The deals cover only tariffs on industrial goods. Agricultural products are excluded – the two governments announced last July that they had reached an agreement to negotiate a trade deal on certain goods, but that these did not include farm products. Congress is now insisting that the deal should cover farm products. Tariffs on industrial products are generally quite low, about 3 percent on average, while farm goods benefit from tariffs of about 23 percent.

"Agriculture will certainly not be part of these negotiations, this is a red line for Europe," Malmstrom said during a news conference Monday.

France voted against the decision to give the commission authority to negotiate, while Belgium abstained.

Getting a deal on conformity assessment would reduce the costs for businesses of getting new products tested and certified safe for sale and use in the EU and the U.S. At the moment, the two sides have different rules and procedures for electrical, mechanical and engineering goods, including automotive parts and medical devices.

A Brussels-based trade lawyer said there was "a lot of concern" among EU clients because of the uncertainty around U.S. trade policy. Clients wanted to see how they might be affected by tariffs imposed on their exports to the U.S. and on any diversion of trade flows because of tariffs applied to Chinese products. The lawyer said clients were expected to keep a close eye on these talks as well. "We anticipate there will be questions," the lawyer said.

In a separate development, the EU will on Wednesday publish for consultation a list of U.S. exports to be targeted for tariffs in retaliation for illegal U.S. subsidies to U.S. aerospace company Boeing. The World Trade Organization (WTO) ruled last week that the U.S. had failed to remove tax breaks it had ruled illegal.

The EU estimates that the damage to its industry from the tax breaks is €20 billion ($22.6 billion). The WTO will rule later this year on its assessment of the damage.