Tariff of 15% ‘challenging' but avoids a trade war
He said 'the devil is in the detail' of the trade agreement finalised on Sunday by Donald Trump and European Commission president Ursula von der Leyen in Scotland.
'We had a lot of modelling carried out on the various different options, and some were very perverse, that would have closed the market if you had over a 30% tariff with a stacking mechanism,' Mr Burke told RTE Radio.
'The key thing is that there will be a number of carve outs. Obviously, aviation has been cited as zero-for-zero, but also in relation to agrifoods and potentially spirits.'
The bloc is set to face 15% tariffs on most of its goods including cars, semiconductors and pharmaceuticals entering the US and 'zero for zero' tariffs on a number of products including aircraft, some agricultural goods and certain chemicals – as well as EU purchases of US energy worth 750 billion dollars over three years.
Mr Burke said it was his understanding that the 15% tariff on the pharmaceutical sector would be a maximum rate.
He added: 'I think the president of the Commission has been very clear that 15% will be a ceiling.'
It is still unclear from the deal, agreed five days before Mr Trump's threat of a 30% tariff would have come into effect, will mean Ireland will need to invest in US energy, he added.
'This all has to be worked out yet, as you can appreciate, I'm only hearing this for the first time last night, and we have nothing on paper.'
Ireland's premier Micheal Martin and deputy premier Simon Harris welcomed the agreement struck on Sunday, saying that while Ireland 'regrets' the baseline tariff of 15%, it welcomed the certainty for businesses.
Mr Harris said further detail was needed around how tariffs would affect sectors including pharmaceuticals.
Ireland remains vulnerable to a slow down in trade with the US economy, due to exports of products such as alcohol, dairy and beef.
The Irish government has also expressed concern at how tariffs could affect pharma multinationals based in Ireland, which employs about 45,000 people in Ireland, as Mr Trump had signalled he intended to target that industry.
In addition, 65% of all aircraft are leased through Ireland globally.
Business group Ibec said although the uncertainty may be dissipating, the agreement was 'punishing' for Europe.
The group's chief executive Danny McCoy said 'Europe has capitulated on this' and 15% is 'very substantial'.
'I don't think it's a great deal if I'm really honest,' Simon McKeever, of the Irish Exporters Association, said.
He said the deal was not a good one for Irish businesses and said the EU was negotiating with 'one if not two hands tied behind our backs' because of the EU's reliance on the US in relation to defence and security.
He said questions remained about the effect it would have on Northern Ireland given the UK had a lower tariff of 10% in place.
'There's a huge amount of this that is extremely uncertain,' he said.
Last week, Finance Minister Paschal Dohonoe said the Irish government would spend 9.4 billion euro on its budget in October, based on a zero-tariff scenario for next year.
He and Public Expenditure Minister Jack Chambers said these estimates would need to be revised if there was a shock to the Irish economy.
Mr Burke said it was not naive to base the government's economic scenario on a zero-for-zero trade agreement with the US.
'No it wasn't because we didn't know what we were to be faced with,' he said on Monday.
'We do need to find out what happens in other areas, because this is very complex.
'It depends what happens with China, that's a very significant market that a deal hasn't happened yet.
'It really impacts what happens with our exporters here in Ireland as well, because so much product is in danger of being redirected into EU market.
'We also don't know what separate carve outs are going to emerge for the different sectors that are so vulnerable from an Irish perspective.
'Until we get flesh on the bones and all those areas over the coming weeks, we'll be in a better position then to really put forward what budgetary parameters (we) will end up with.'
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