Accepting trade tariffs of 10 per cent on goods sold to the United States as the “new baseline” would be a real challenge for Irish businesses, Tánaiste and Minister for Foreign Affairs and Trade Simon Harris has said.
Negotiations between the European Union (EU) and the US are continuing, to stave off the worst excesses of US President Donald Trump’s sweeping tariff agenda.
Since the start of April nearly all goods sold into the US have been hit with a global 10 per cent tariff, which is effectively a tax paid to import goods.
Mr Trump initially said trade coming from the EU would be subject to a higher 20 per cent rate, before more recently threatening tariffs of 50 per cent, if no deal was agreed before July 9th.
The US president has used the threats of steep import duties to leverage concessions from trading partners, with the UK Government among those who have signed up to new trade deals.
EU negotiators had been hoping to strike a deal that would roll back the near-blanket tariffs. However, officials in Brussels have begun to accept any agreement will likely mean conceding to import duties of 10 per cent, in place since Mr Trump’s “liberation day” announcement.
Speaking on Monday., on his way in to a meeting of EU foreign ministers in Brussels, Mr Harris said it seemed the position of the US administration was that tariffs of 10 per cent were “the new baseline”. The Fine Gael leader said that would pose “a real challenge” for some sectors of the Irish economy.
US trade representative Jamieson Greer had outlined the Trump administration was open to carve outs for certain industries, where both the EU and US agreed to “zero for zero” tariff rates, Mr Harris said.
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The EU previously pitched the idea of each side dropping pre-existing tariffs on industrial goods, such as cars, to zero.
“I think the European Commission and [EU trade commissioner] Maroš Šefčovič are quite right to be ambitious in terms of suggesting many sectors where we’d like to introduce zero for zero tariffs”, Mr Harris said.
The recent discussion between Mr Greer and Mr Harris also touched on the prospect of US tariffs on pharmaceutical imports, which Mr Trump views as a way to pressure pharma firms to relocate manufacturing sites to the US.
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Mr Harris said he felt there “was a recognition that the EU and the US are much more interdependent on pharma, than perhaps had been alluded to in the early days of the rhetoric around trade”.
Pharmaceuticals are one of the few industries Mr Trump has not levied tariffs on to date, however he continues to warn they are coming.
Pharmaceutical products sold to the US account for a big portion of the Republic’s total trade exports, due to the concentration of US firms, such as Pfizer, Eli Lilly, MSD and Johnson & Johnson, with manufacturing plants in Ireland.
Mr Harris said he hoped the EU and US would find “a constructive, creative way forward on pharma”, that spared the industry from trade levies.
