The United States has handed an opportunity to China to grow its global trading influence by retreating from international structures, Tánaiste Simon Harris has said.
He also noted that the US had “missed a trick” arising from the new trade agreement with the European Union, which, while allowing for comparatively favourable trading arrangements between the bloc and the US, meant Irish and European companies had paused American investments.
“I do think there is an irony in the United States’ position,” Mr Harris said in Dublin on Friday.
“While [the US is] talking a lot about China, by withdrawing from multilateralism, in many ways, it’s actually providing an opportunity for China who are actively taking that opportunity and communicating into many countries, most particularly the Global South.”
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Mr Harris was speaking at an event organised jointly by the European Commission and Irish think tank the Institute of International European Affairs (IIEA), in Dublin on Friday. Alongside Mr Harris, the event heard from EU trade commissioner Maroš Šefčovič and Taoiseach Micheál Martin.
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Mr Harris also noted that Irish and European drinks companies had paused investment in the US due to the recent imposition of 15 per cent tariff barriers on their products.
The inception of trade negotiations in the US, he argued, had been an effort to see if Europe could “be divided” and if member states could be “picked off” due to competing national interests. But European solidarity had prevailed.
He said there was a “genuine satisfaction” with the trade deal and “warmer language towards Europe” in Washington DC, where he visited for talks with US commerce secretary Howard Lutnick last week.
Mr Sefcovic, meanwhile, told the event the EU had secured a “very good deal” with the US.
He said there would be “permanent challenges” in the new trade relationships, but that negotiations were ongoing in areas such as spirits, steel and medical devices.
“We have to be prepared for this permanent relationship management,” he said.
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Earlier, Taoiseach Micheál Martin said the EU-US trade deal provided some stability but ultimately left EU-US trade in a worse position than at the start of the year.
The world has witnessed an “amplification of geopolitical and trade risks,” Mr Martin said, with a “significant shift” in trade policy under way stemming from Donald Trump’s administration.
Mr Martin said the future success of Ireland’s economy will “depend on our ability to adapt and react to these changing realities”.
“The EU-US deal leaves us in a worse position than we were at the start of the year,” he said. A lot had changed since then, however, and while the situation was worse, he said there was a “degree of certainty and stability” arising from the trade deal which “avoids a harmful tariff escalation”.
The value of the agreement, he argued, was demonstrated by the non-application of 100 per cent tariffs on pharmaceutical products, announced last week by Mr Trump, to EU exports. Mr Martin said 70 per cent of global trade was still continuing under World Trade Organisation rules, despite upheavals to the global system. “The world has not collapsed ... and we should be mindful of that.” But he warned that if the world retreats behind trade barriers “ultimately everyone loses”.
He acknowledged the “disappointment and deep concern” in some sectors, including among distillers, and sought to assure firms in these areas that Ireland was working “intensively” to seek further exemptions under the deal.
The Taoiseach also noted the potential implications for the all-Ireland economy, and for Northern Ireland, due to the different tariff treatment for the two jurisdictions.
He said that Ireland had learned a lot about integrated supply chains on the island during Brexit, and pledged to continue to highlight these issues during talks with the US. He said Mr Sefcovic had a “deep understanding” of the situation on the island due to his work on the Brexit withdrawal agreement.
