It is unlikely that for as long as US president Donald Trump is in power the environment for trade will ever be settled. Potential chaos will always be around the corner.
However, it is important to recognise the better days, too, and yesterday falls into this category. The agreed EU/US statement on trade – following the handshake deal more than three weeks ago between Trump and European Commission president Ursula von der Leyen – is first of all important in and of itself. Initially expected within days of the meeting in Scotland, its nonappearance had raised fears that both sides were not on the same page.
Now, an agreed piece of paper with important details has been signed off in Brussels and Washington. And some of the detail suggests that the EU side may have got more from the deal than some have suggested. Time will tell.
In particular, a commitment to cap tariffs on pharmaceuticals and semiconductors at 15 per cent removes some uncertainty. There had been fears of higher tariffs in these areas following special studies being undertaken on them by the Trump administration.
RM Block
Presuming the deal sticks, this will not now happen, while some areas of pharma will be excluded altogether. That said, as with other sectors, tariffs impose costs on consumers and producers and are a no-win policy approach.
The 15 per cent tariffs on many exports – and the expectation of something similar on pharma – will be a burden on exporters. They will also damage the US economy and push up prices.
Trump’s tariff agenda is still bad news for Ireland and uncertainties remain about the impact of his wider industrial policy. But the codification of large elements of the US/EU deal at least keeps this process on track and avoids a transatlantic trade war. It also gives some more clarity to key sectors of the economy and raises hopes that the worst can be avoided.
More battles and uncertainty remain ahead, but the publication of the joint statement is a positive step.
