The EU leaders supported the steps taken by the European Commission to respond to the U.S. measures as appropriate and in a proportionate manner.
European businesses have been spared U.S. tariffs on steel and aluminium due to come into force tomorrow.
US President Donald Trump on Thursday authorized the suspension of controversial tariffs on steel and aluminum imports from key trade partners including the European Union.
Argentina, Australia, Brazil, Canada, Mexico, and South Korea will also be exempt from the penalties of 25 percent on steel imports and 10 percent on aluminum, along with the EU, Lighthizer said.
US Trade Representative Robert Lighthizer told a Senate committee that Trump authorised a "pause" in the imposition of the tariffs, which take effect on Friday, while talks are underway to find a more permanent solution. "But we expect that Secretary Ross will recommend that the European Union is excluded as a whole".
Some leaders bristled at Trump's tactics and said that his methods were unworthy of close allies.
"The amount of profits now going untaxed is unacceptable", European Commission Vice President Valdis Dombrovskis said in a statement. The EU had threatened to impose retaliatory measures on iconic U.S. products such as Kentucky bourbon and Harley Davidson motorbikes.
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Trump said each of these exempted countries has an important security relationship with the US. Malmström and U.S. Commerce Secretary Wilbur Ross announced Wednesday they were launching "immediately a process of discussion ... on trade issues of common concern".
There is likely to be push-back from Taoiseach Leo Varadkar when he arrives for the summit of EU leaders in Brussels on Thursday and talk from the smaller states during the two-day European Council that this might be something that the EU will live to regret.
The climbdown came as Trump announced new sanctions against China for what he called the theft of U.S. intellectual property - which Beijing has vowed to meet with tit-for-tat retaliation.
The commission earlier this month drew up a list of potential counter-measures, including tariffs on peanut butter, motorcycles and denim jeans, in case Trump slapped on the tariffs. The Europeans have argued that a trade war would seriously hurt the ability of the USA and European leaders to tackle unfair Chinese practices.
They are also attempting to renegotiate the North American Free Trade Agreement with Canada and Mexico.
German Economy Minister Peter Altmaier laid out hope that Malmstroem's shuttle diplomacy may have borne fruit stressing that "fighting until the last minute is worth it".
"These are things that would be mutually beneficial if we can solve, and we're always willing to engage but we need to know what is the expected outcome for May and how serious is that deadline", Malmstrom said.