Harris urges exemption for key sectors from retaliatory tariffs

RTÉ News​

a day ago

Tánaiste Simon Harris has urged the EU's trade commissioner to exempt sectors key to the Irish economy, such as aviation, medical, agrifood and the equine industry, from any retaliatory tariffs the EU could impose on a range of US products should the current trade negotiations fail.
In a letter to Maroš Šefčovič, seen by RTÉ News, the Minister for Foreign Affairs and Trade also urged the trade commissioner, previously the EU's Brexit negotiator, to ensure that Europe's potential retaliation against US President Donald Trump's threat of sweeping tariffs does not adversely impact Northern Ireland.
The letter essentially sets out the Government's position as the deadline for a potential escalation of the trade war between President Trump and the European Union looms.
Talks between EU and US trade officials have been intensifying in recent days in an effort to avert wholesale US tariffs on European goods, which in turn would trigger a significant retaliatory response by the EU.
On 2 April, President Trump announced 20% "reciprocal" tariffs on nearly all European goods, as well as sweeping duties on scores of other countries.
After turbulence on the bond markets Mr Trump paused the 20% tariffs for 90 days (until 9 July).
Negotiations between the European Commission, led by Mr Šefčovič, and the Trump administration, led by Trade Secretary Jamieson Greer and Commerce Secretary Howard Lutnick, then got under way.
Last month, Mr Trump threatened to hit the EU with 50% tariffs, complaining that negotiations were "going nowhere".
That threat was lifted following a phone call with European Commission President Ursula von der Leyen.
US and EU teams negotiating a potential trade deal that would lift the threat of mutual tariffs have intensified their work in recent days.
Despite that the EU has been readying a list of hundreds of US product lines worth some €95 billion which could be hit by retaliatory tariffs should those negotiations fail.
The list, which was published on 8 May, was followed by a four week consultation period between the European Commission and member states.
Mr Harris's letter to Mr Šefčovič essentially codifies Ireland's concerns about the damage the list could do to key sectors of the Irish economy.
He wrote: "I have heard concerns both about the immediate impact of the proposed rebalancing measures on imports, but also about the potential for them to result in further retaliatory action by the US.
"I believe this is a reasonable and well-founded concern which we must also take account of in formulating our approach. It is particularly acute in the agri-food and drinks sector."
The Tánaiste highlights the risk to Ireland's "leading" role in the global aviation sector, given that it is home to Ryanair, "Europe's largest airline, as well as the world's leading aircraft leasing sector."
The Government believes that the leasing sector would be damaged given its reliance on US spare parts.
"Given the limited capacity of EU manufacturers to meet demand in the sector, I believe that rules of origin for goods with a very long service life, such as whole aircraft and helicopters, need to be very carefully considered in the eventual approach to applying tariffs.
"Specifically, I would ask that used aircraft are excluded from import tariffs," he wrote.
The Tánaiste also highlighted the risk to Ireland's medtech industry, which relies heavily on an integrated supply chain with the United States.
He wrote: "I have consulted with stakeholders and have concerns about the potential impact of the proposed list, which includes a large number of tariff lines (around 800) which could potentially impact on essential medical devices for European patients.
"I would ask that you engage in detail with the medtech sector to ensure that our rebalancing measures are targeted in a way that does not undermine this important sector and the lifesaving technologies they supply to consumers across the EU."
He said that while it may be "theoretically possible" for companies to switch suppliers, in practice this was not an immediate option in the short term due to the regulatory and certification requirements.
Mr Harris also raised "an issue of serious concern in Ireland," namely the potential for the EU to retaliate by imposing tariffs on animal feed "for which Irish farmers have a very high reliance on imports from the US."
He wrote: "Increasing costs on these vital inputs will not only put further pressure on a stressed sector but risks feeding through in increased prices for consumers (in one area, beet pulp, Ireland accounts for the entirety of EU imports)."
The Tánaiste also raised concerns about the inclusion of pure breeding horses on the EU's list of countermeasures.
He wrote: "The equine sector provides significant employment in rural areas, with the US by the far the largest export market for Irish thoroughbreds outside the UK.
"This trade depends on horses moving in both directions. I would ask that these items be removed from the list - doing so will have a very limited impact on the overall value of the list and would reduce disproportionate impact on Ireland."
The Tánaiste concluded by warning about the risk of EU retaliatory measures to Northern Ireland, given its hybrid trade status post-Brexit.
"I would also like to highlight the need to minimise unintended consequences on Northern Ireland of the current situation to the extent possible," he wrote.
"Considering your deep experience from EU-UK negotiations, and your continuing responsibilities in that relationship, I know you will appreciate that this is a politically sensitive topic and will need careful management."
The Government is understood to be relieved that neither pharmaceuticals nor dairy products appear on the list of EU countermeasures.
Officials have stressed that while aircraft, spirits, including whiskey, and medical devices are included, the EU's retaliatory measures would be implemented immediately and may not be implemented at all if a deal is reached.
While officials have said EU and US teams are making progress, it is understood the final say on whether a trade agreement can avert an escalating trade war will go to President Trump.