27-05-2025
- Business
- Irish Independent
‘Time is very short' for EU to land trade deal with US, says Michael McGrath
Michael McGrath said the US must be 'willing to engage and reach a compromise' if a deal is to be reached.
But he said the stakes are high and failure to reach agreement would mean economic devastation for both sides.
US president Donald Trump has agreed to delay a threatened 50pc tariff on all EU goods – which he announced just on Friday – until July 9.
It followed what he said was 'a very nice phone call' with the president of the European Commission, Ursula von der Leyen.
Ireland is one of a number of EU countries to welcome the agreement to intensify talks and avoid any escalation of the transatlantic trade war.
Speaking to the Irish Independent, Mr McGrath said 'the window of time is very short, six weeks is a very short time for the detailed discussions that have to take place'.
But he said that businesses and consumers 'need certainty' and no stone will be left unturned.
'The stakes are incredibly high,' he said. 'If we ended up in a trade war with tariffs of the level president Trump indicated last week, that would be devastating not just for Ireland, but for the EU as a whole. It would derail most transatlantic trade.
'I don't expect that to pass. I believe a deal can be done and we will certainly do everything we can to achieve that.
'But that requires two parties that are willing to seriously engage and compromise and reach a durable agreement.'
ADVERTISEMENT
Agriculture Minister Martin Heydon, who attended the AgriFish council in Brussels yesterday, said the current environment was like 'Brexit all over again', which will hurt Ireland's citizens and companies.
'A trading partner of Ireland is taking a very significant change in policy, and that's going to hurt us, our companies and our citizens,' Mr Heydon said.
He said as the EU draws up a list of counter measures, it was now necessary for Ireland to inform the EU of the sectors in Ireland that are particularly sensitive.
In particular, the minister highlighted Ireland's butter and whiskey exports to the US.
'If you look at our €2bn in exports last year, Irish whiskey is a key part of that and our Irish whiskey investors are under really significant pressure right now,' he said.
'From our dairy perspective, Kerrygold butter has such a remarkable market share in America. These are all products that will be impacted by tariffs down the line.'
Mr Heydon said while the EU does not want to use a list of countermeasures, it will be difficult for the commission to draw one up that does not impact the exports of member states.
'We would recognise it's really hard. The EU is in a position here where it is coming up with a list with a value of €95bn. It is not possible to produce lists like that, that doesn't impact a range of different measures,' Mr Heydon said.
Taoiseach Micheál Martin yesterday said 'the world cannot afford a trade war' but that the EU is 'engaging sensibly' and the US 'is anxious to get a deal' but has issues it wants resolved through negotiation.
'Europe has responded in a sensible and modest way and hasn't done anything to escalate this in any shape or form,' Mr Martin said.
'The EU doesn't want to escalate this and wants to land this in a reasonable zone.'
The Tánaiste and Foreign Affairs and Trade Minister, Simon Harris, will brief the Cabinet on the latest developments.
He will also stress that time is of the essence, and there are just 43 days left to engage in meaningful and substantive negotiations before the original 90-day pause in tariffs being imposed, comes to pass.
President Trump dropped the plan to recommend a 50pc tariff effective from June 1 after Ms Von der Leyen told him that the EU needed more time to come to an agreement.
'I agreed to move it,' Mr Trump said before returning to Washington after a weekend in New Jersey. 'She said we will rapidly get together and see if we can work something out.'
Ms Von der Leyen said in a post on X that she had a 'good call' with Mr Trump and the EU was ready to move quickly.
'Europe is ready to advance talks swiftly and decisively,' she said. 'To reach a good deal, we would need the time until July 9.'
The negotiations had been stuck, with Washington demanding unilateral concessions from Brussels to open up to US business while the EU seeks an agreement in which both sides could gain, say people familiar with the talks.
