Irish and EU pharma sector to be hit by 15 percent tariff

Irish Post

2 days ago

IRELAND has responded with cautious relief to the new EU-US trade deal announced on Sunday by US President Donald Trump and European Commission President Ursula von der Leyen.
While the agreement imposes a 15% tariff on all EU goods exported to the United States—including key Irish sectors like pharmaceuticals, autos, and semiconductors—it avoids the far more damaging 30% rate that had been under threat until late last week.
Irish officials say the outcome, while not ideal, brings much-needed clarity after months of uncertainty.
Minister of State for Foreign Affairs Neale Richmond said Ireland is 'not exactly celebrating,' but added that the deal represents 'probably the least bad option' given the circumstances.
Speaking to BBC Radio Ulster, he described the agreement as unlike any other trade deal he had seen in his 15 years working on EU trade policy.
'We don't want a tariff war. Tariffs are a bad thing. We want stability for businesses, and we have that today,' he said.
Ireland, the most US-dependent EU economy, exported €81.1 billion worth of goods to the United States in 2024.
Much of that comes from the pharmaceutical industry, which had faced the prospect of being hit by a separate US investigation into national security risks tied to medical imports.
President Trump has floated the possibility of slapping tariffs as high as 200% on pharma, in an effort to force US companies to bring manufacturing back home.
That investigation is expected to conclude next month, but for now, EU pharma exports to the US will fall under the 15% ceiling agreed in Sunday's deal.
Minister for Public Expenditure Jack Chambers said the original threat of 30% tariffs would have been 'severely damaging for the Irish economy' and could have resulted in significant job losses.
'The stability and predictability of what's being set out here gives certainty to the business community,' he told RTÉ, adding that the Department of Finance will now begin modelling the economic impact of the 15% tariff across key sectors.
The US-EU deal also commits the EU to purchasing $750 billion in American energy and making $600 billion in new investments in the US by 2028.
At the same time, the EU has agreed to eliminate tariffs on US industrial goods, a move Washington says will benefit American farmers, manufacturers, and exporters.
A White House fact sheet claimed the agreement would generate tens of billions of dollars in new revenue and help close the trade gap between the two economies by reshoring production and expanding US market access in Europe.
Despite those benefits for the US, the deal still raises concerns across Europe, particularly in export-heavy economies like Ireland.
Taoiseach Micheál Martin called the deal 'very welcome' in terms of stability but acknowledged that higher tariffs would make trade 'more expensive and more challenging.'
He said the agreement would help protect Irish jobs, though it falls short of the free trade status quo that had previously existed.
The European Commission, which negotiates trade deals on behalf of the EU bloc, described the agreement as a 'framework' and indicated that further technical negotiations will continue in the weeks ahead.
EU member state ambassadors are expected to meet this week for a formal debrief.
While the pharmaceutical industry remains under review in the US, Richmond said there had been 'a case made' for certain medications to be exempt from tariffs, noting their importance not just to Irish businesses but also to American patients who depend on them.
For now, Ireland and its exporters are adjusting to a new reality: one where tariffs are no longer a distant threat but an operational cost.
As former British ambassador to the US Lord Kim Darroch put it to the BBC, 'It's a relief that it's not worse, but this isn't anything for great celebration. This is a backwards step.'