Splits have emerged between European governments over talks to avert crippling tariffs on trade, as EU negotiators press United States president Donald Trump’s administration for a deal in the next two weeks.
Ireland, Germany, Italy and others are keen to land a quick deal with the Trump administration, while the French government is concerned about the European Union giving too many concessions.
Mr Trump has threatened to put tariffs of 50 per cent on imports sold into the US from the EU, unless the two sides agree a trade deal by July 9th. Near-blanket tariffs of 10 per cent have been charged on EU goods since early April, with cars and steel subject to higher 25 per cent duties.
Negotiators from the European Commission, the EU executive that leads on trade policy, have been putting more pressure on US counterparts, to get some form of tariff deal over the line before the July 9th deadline.
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There is concern in Government that existing tariffs will become the new “baseline”, two sources said. Cementing tariffs at that rate would still have a significant economic impact, given the huge amount the Republic exports to the US.
Officials in the Department of Finance are preparing an assessment of the impact to the Irish economy if tariffs of 10 per cent remain .
European Commission president Ursula von der Leyen briefed EU leaders at a summit in Brussels late on Thursday about the progress of talks. It is understood she gauged how much national capitals would be ready to give in the tariff negotiations.
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Germany and Italy want the commission to make sure it agrees some type of deal, or the broad strokes of an agreement that heads off steeper tariffs, according to one source briefed on the discussions.
It is understood the French government has been more hesitant and concerned about the level of concessions the EU would give to the Trump administration.
French president Emmanuel Macron has said that if some US tariffs became permanent, the EU would have to consider putting similar duties on goods coming from the US.
EU negotiators are expected to intensify efforts to hammer out a deal with their US counterparts in the next 12 days.
Officials have largely accepted that any deal will not remove Mr Trump’s 10 per cent “liberation day” tariffs, which apply to nearly all trade except pharmaceutical products and computer chips, which he has promised to hit with separate levies.
EU trade commissioner Maroš Šefčovič said he is continuing to work towards a “negotiated solution”, after a phone call with US trade representative Jamieson Greer on Friday afternoon.
Dublin and other capitals are eager to land at least a preliminary agreement, rather than extend the US tariff deadline beyond July 9th. Government sources said there is a lot of unease about the uncertainty the threat of looming tariffs was causing businesses.
The commission is preparing a package of retaliatory tariffs as leverage to levy on US trade if negotiations stall. It has proposed targeting Boeing and other aircraft manufacturers, the automobile industry and a host of other US products and sectors.
The Government has asked the commission to reconsider putting counter tariffs on aircraft, medical devices, bourbon and agricultural products, to shield Ryanair, Irish whiskey distillers and the medtech sector from US crossfire in the event of a full-blown trade war.
The EU’s retaliatory package would only affect €25 billion worth of US trade, rather than €95 billion, if the EU was to remove from the tariff list every product member states want off, the commission recently told diplomats in a closed-door meeting.
