EU and US reach deal on 15% tariffs, averting potential trade war
European Union
and
US
have agreed a deal that will lock in
tariffs
of 15 per cent on most EU imports to the US, but prevent the prospect of an economically devastating trade war.
The final terms of the deal were worked out during a meeting between European Commission president Ursula von der Leyen and US president Donald Trump at his Turnberry golf resort in Scotland on Sunday.
The EU hopes the deal will draw a line under months of uncertainty, shifting deadlines, and threats of sweeping tariffs from Mr Trump, which had cast a shadow over the European economy.
The commission, the EU's executive body, which is responsible for trade policy, had been scrambling to secure an agreement before an August 1st deadline. Mr Trump had threatened to triple import levies on nearly all trade coming from the EU if a deal was not done by then.
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The accord effectively sees the EU accepting import taxes of 15 per cent on most of its huge volume of trade with the US.
Speaking after the negotiations ended, Ms von der Leyen said the US had agreed to cap any future tariffs on pharmaceutical products at that rate.
EU negotiators had pushed for limits to tariffs on pharma products to shield the sector from huge trade levies Mr Trump had threatened to put on the industry.
The rate would also apply to cars, representing a cut on the current 25 per cent tariffs the European automobile sector has faced for months when selling cars to the US.
The two sides agreed that no tariffs would be charged on imports of aircraft, certain chemicals and some agri-food goods, though the finer details of what agricultural products will benefit from these exemptions is still to be worked out.
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EU pushing to cap future tariffs on pharma in US deal
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Blanket tariffs of 15 per cent represent a serious economic blow to Ireland given its large volume of trade with the US. Finance officials will begin studying the likely impact on the State's economic projections and plans for October's budget.
The Government is expected to seek firm assurances that the EU-US agreement will spare the pharma sector from tariffs of more than than 15 per cent.
Mr Trump's plans to use tariffs to pressure pharmaceutical firms to move manufacturing capacity to the US has been a point of concern given that the industry accounts for much of the Republic's exports to the US.
He previously said he was planning tariffs of 'up to 200 per cent' on the sector under a separate process.
Taoiseach Micheál Martin said the agreement would bring 'clarity and predictability' to the transatlantic relationship.
'We will now study the detail of what has been agreed, including its implications for businesses exporting from Ireland to the US, and for different sectors operating here,' he said.
Tánaiste and Minister for Foreign Affairs and Trade Simon Harris said that 'while Ireland regrets that the baseline tariff of 15 per cent is included in the agreement, it is important that we now have more certainty on the foundations of the EU-US trade relationship'.
Negotiations between the US and EU camps had intensified in recent weeks. European Commission officials were confident they were on the cusp of a deal pending Mr Trump's approval.
However, several sources in Dublin and Brussels said much had still hung on Sunday's face-to-face talks between Mr Trump and Ms von der Leyen.
The deal includes EU commitments to purchase set amounts of US oil, nuclear power and liquefied natural gas (LNG) annually.
Nearly all EU trade to the US has been charged tariffs of 10 per cent since early April, with imports of cars and steel facing higher levies.
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