European Union negotiators proposed a deal in February where all tariffs on the transatlantic trade of industrial goods would be dropped, in a bid to avert a trade war with the United States.
The proposed deal would have seen both the EU and US agree to cut long-standing import duties charged on the trade of automobiles and other industrial products. It predated US president Donald Trump’s sweeping tariffs announced in recent days and weeks.
EU trade commissioner Maroš Šefčovič said he made the offer to US commerce secretary Howard Lutnick, when the two men met in February. Mr Trump has previously complained about a 10 per cent tariff the EU charges on imports of cars sold from the US.
The proposed deal would have seen both the EU and US agree to get rid of existing tariffs on a range of trade, from machinery to automobiles, chemical products, pharmaceutical ingredients, rubber, plastic and other industrial products.
EU negotiators had also offered to buy more liquefied natural gas (LNG) and soybeans from the US, and co-operate closely when it came to sourcing critical raw materials and developing semiconductors, Mr Šefčovič said.
Mr Trump’s decision to levy tariffs of 20 per cent on nearly all imports coming into the US from the EU, and varying tariffs on trade from most of the rest of the world, continued to rock financial markets on Monday.
The across-the-board tariffs followed earlier duties of 25 per cent Mr Trump had put on imports of steel and foreign-made cars.
Trade ministers from the EU’s 27 states met in Luxembourg to debate how to respond to the tariffs.
Speaking in Luxembourg, Tánaiste Simon Mr Harris indicated the Government might consider limited supports to “individual sectors”, particularly bruised by the expected disruption to transatlantic trade.
Coalition sources in recent days rejected suggestions there would be any return to the large business support schemes seen during the Covid-19 pandemic.
“If there’s a need to support individual sectors as we go through this global financial challenge and the economic turmoil that president Trump’s announcements have caused, Ireland certainly will always keep that under review,” Mr Harris said.
Exports of pharmaceuticals products, Irish whiskey and agri products, such as butter, are seen as most exposed in the event of a EU-US trade war.
The European Commission, the EU executive that steers the union’s trade policy, is finalising a package of retaliatory tariffs to put on US goods.
The package of EU tariffs was initially due to hit up to €26 billion worth of US goods, targeting products like motorbikes, jeans and power boats. It is now likely to be smaller, as some products such as US bourbon, are expected to no longer be subject to tariffs, following lobbying from Ireland and others.
Speaking on Monday, Mr Šefčovič said that starting “meaningful negotiations” with the US administration remained his main focus.
Mr Šefčovič said the EU had made it clear that it would not consider changing its system of charging Value Added Tax (VAT) on goods and services, something Mr Trump has likened to tariffs. VAT is charge don all goods, not just imports.
Beyond the initial package of counter-tariffs EU states are due to vote to approve on Wednesday, the EU was considering “additional steps” the bloc could take, he said.
The wide-ranging tariffs unveiled by the White House over recent weeks will hit an estimated €380 billion of EU trade, which accounts for 70 per cent of the bloc’s total exports to the US.
Mr Šefčovič said the EU’s retaliatory tariffs on goods would not be on a similar scale to the US levies.
“We are not in a business to go cent for cent or tit-for-tat or dollar for dollar, but we would of course consider what are all the other instruments [that] we have on the table,” he said.
The Government is opposed to any suggestion the EU should target the US output of digital services, by taking aim at US tech multinationals.
Speaking in Brussels, European Commission president Ursula von der Leyen said US tariffs were having a “large impact” on the global economy.
Dr von der Leyen said there was “not an adequate reaction” to the EU’s previous suggestion to the US that both sides reduce tariffs on automobile imports to zero.
