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Irish Times
13 hours ago
- Business
- Irish Times
White House confirms 15% tariff rate will include pharma and semiconductors
The White House has confirmed the tariff rate of 15 per cent in the trade deal struck with the European Union on Sunday will include pharmaceuticals and semiconductors. The two sectors are key to Irish exports, accounting for the bulk of the €72 billion of goods shipped to the US last year. The Government and the European Commission both said on Monday it was their 'clear understanding' there would be a tariff ceiling of 15 per cent in those sectors. Senior figures in the commission said its negotiating team had been given commitments by US president Donald Trump's administration on this point, but there remained some lingering concern owing to the unpredictable nature of Mr Trump. READ MORE However, a 'fact sheet' published by the White House contains a line stating the tariff rate of 15 per cent will apply to pharmaceuticals and semiconductors, albeit couched in terms that suggest the tariffs will be paid by the EU when in fact they will be borne by US companies or consumers. [ How the EU's 'lopsided' US trade deal was done Opens in new window ] 'As part of president Trump's strategy to establish balanced trade, the European Union will pay the United States a tariff rate of 15 per cent, including on autos and auto parts, pharmaceuticals, and semiconductors,' the White House said. EU Commission trade spokesman Olof Gill noted that the framework agreement was in effect a 'political commitment' rather than a legally binding document. He said Europe and the White House were now working on a joint statement, which will be treated as 'an agreement in principle' that will give the bloc a 'political road map to where we take it from here'. 'Both sides are working very hard now to get the details of that signed up,' he said on RTÉ Radio One. 'We're hoping to do that before the deadline of August 1st set by the US.' At that stage, he said, the EU would be in a position to say 'very clearly' what the next stages are, and will use the joint statement as 'a platform to look at other areas where we can reduce tariffs'. 'This is how it's going to work,' he said. 'Fifteen per cent is across the board. That's going to cover all sectors. It's going to cover pharma. It is going to cover digital. 'What we're talking about here are political commitments. This joint statement I mentioned isn't a legally binding document. These are commitments.' Separately, it has emerged Irish butter entering the US will return to the tariff level in place before Mr Trump came to office, which was around 16 per cent. In a briefing to members this week, business lobby Ibec pointed out that butter had been subject to a tariff based on the weight of the product, rather than a percentage figure which is more common. This worked out at about 16 per cent of the value of the product. Under the finer details of the deal, products which had been tariffed on this basis are to return to their original level rather than the 15 per cent which will apply more generally. This returns Kerrygold, sold by Ornua, to a tariff level at which it has managed to grow its market share in recent years. Since Mr Trump imposed his additional 10 per cent tariff in April, Irish butter imported to the US has faced a punitive tariff of around 26 per cent. Meanwhile, the trade deal has been described by an academic from University College Cork as 'a capitulation' by Europe that will cause 'long-term negative results'. Dr John O'Brien, an academic on financial markets and investments, who was previously an investment manager in London, said the EU had projected 'weakness'. 'The EU commission, and Ursula von der Leyen in particular, has capitulated in the US trade deal with the US,' he said. 'The deal will negatively affect growth. In the short term, this is a better outcome than a trade war. 'However, the projection of weakness by the EU, surrendering to economic threats and accepting a one-sided deal will be noted globally with long-term negative results. China and Russia will be particularly interested in this weakness. 'The financial markets reacted by selling the euro, signalling an expectation of lower growth across the EU. This view was repeated as stock exchanges across the EU also fell.' Dr O'Brien said the 'supposed benefit' of certainty was 'overstated', and, echoing the comments of Mr Gill, noted that the current deal was just a 'political agreement'. 'There are many failure points before a deal is signed,' he said. 'Having conceded once to Trump there is no guarantee that he will not come back for more having sensed weakness. Business planning on the basis of 15 per cent and done may be surprised before the end of the year.' Matthew Ryan, head of market strategy at global financial services firm Ebury, said estimates of about a 0.3-0.5 per cent hit to the bloc's GDP in the next three to five years was 'moderate, but not enough to fuel recession concerns'.
New York Times
2 days ago
- Business
- New York Times
Trump Administration Live Updates: President to Host Starmer at His Golf Courses in Scotland
The United States and the European Union also agreed to drop tariffs to zero on a range of goods, including aircraft, plane parts, certain chemicals, certain generic drugs, semiconductor equipment and some agricultural products. The European Union and the United States agreed on Sunday to a broad-brush trade deal that sets a 15 percent tariff on most E.U. goods, including cars and pharmaceuticals, averting what could have become a painful trade war with a bloc that is the United States' single biggest source of imports. President Trump said that the European Union had agreed to purchase $750 billion of American energy, which Ursula von der Leyen, the president of the E.U.'s executive branch, told reporters would be spread out over three years. The 27-nation bloc also agreed to increase its investment in the United States by more than $600 billion above current levels, Mr. Trump said, adding that the European Union would buy military equipment. A senior U.S. official said that those investments would include pharmaceuticals and the automotive industry, among others. The two sides also agreed to drop tariffs to zero on a range of goods, including aircraft, plane parts, certain chemicals, certain generic drugs, semiconductor equipment and some agricultural products, Ms. von der Leyen said. Altogether, while it was clear that major details still needed to be hammered out, the framework seemed likely to permanently reshape the trading relationship between two of the world's largest and most interconnected economies. The agreement will 'rebalance, but enable trade on both sides,' Ms. von der Leyen said as she sat next to Mr. Trump and the leaders made the announcement. 'We made it,' Mr. Trump said. Not all higher tariffs were eliminated. A senior U.S. official said the 50 percent tariff the Trump administration had imposed on steel and aluminum globally was not part of the deal, though Ms. von der Leyen suggested that those might be reduced through further negotiation. The U.S. official added that European pharmaceutical and semiconductor exports will be subject to a 15 percent tariff, regardless of what tariffs the Trump administration ultimately levies on those industries in other countries. The administration is currently preparing an investigation that will apply tariffs to those sectors globally, which the official said could come in two or three weeks. Pharmaceuticals are Europe's most important export to the United States, and those pending tariffs had become an obstacle to resolving the trade talks. Ms. von der Leyen said that no decisions had been made yet on whether wine and spirits would be exempt. That is something that 'has to be sorted out in the next days,' she said. Like many preliminary agreements Mr. Trump has announced, this one had few details. For some of the 'deals' that Mr. Trump reached, other governments have seemed to lack clarity on what exactly they agreed to, and it remains unclear which tariff rates will apply to which products as of Aug. 1. Though the agreement leaves many questions to be resolved, it could bring a measure of calm to one of the world's most important economic relationships and allay fears of an escalating trade war. The European Union last year accounted for nearly $610 billion of the $3.3 trillion in goods imported by the United States. The 15 percent tariff rate given to Europe mirrors the main tariff rate of the U.S.-Japanese trade agreement that was announced last Tuesday, and is lower than the 19 and 20 percent rates imposed on several Southeast Asian countries. But it is higher than the 10 percent tax that Europeans had been angling for, and that Mr. Trump applied to British goods. It's also much higher than tariffs have been historically. According to the World Trade Organization, before Mr. Trump came into office, the trade-weighted tariff the United States charged on foreign goods was 2.2 percent, while the European Union's was 2.7 percent. 'There's a lot of issues that I think are still very unclear,' said Mujtaba Rahman, managing director for Europe at the Eurasia Group. 'If there aren't further exemptions to be negotiated to that 15 percent, I think it's a far more suboptimal deal than the member states were hoping to achieve.' The deal followed weeks of unpredictable talks. The Europeans believed they were close to a deal, only to have Mr. Trump send them a letter on July 11 threatening a rate of 30 percent unless an agreement was reached by Aug. 1. Even after that announcement, Ms. von Der Leyen had stressed the importance of continuing talks and trying to reach a negotiated deal. But the European Union also continued working to put the finishing touches on a plan to retaliate against Mr. Trump's tariffs, one that could be enacted quickly if needed. They finalized that raft of potential countermeasures last week. The goal was to create leverage. And, if talks broke down, some of the 27 E.U. member states thought that having a plan to hit back was essential. The new deal may prevent any retaliation and thus avoid a tit-for-tat trade war that could have been economically damaging for both sides. A trade conflict could also have further soured the European Union and United States' relationship — already strained this year by issues surrounding military spending, support for Ukraine, free speech and technology regulation. 'The European response on trade would have been fundamentally different had they not been worried about backlash in these other geopolitical theaters,' Mr. Rahman said. U.S. officials said that they had met with the Europeans for round after round of negotiations, with the E.U. originally not offering many concessions. But after Mr. Trump sent the bloc a letter threatening stiff tariffs, they made more headway. The Europeans had also acknowledged Mr. Trump's argument that the trade relationship was unbalanced and needed to be corrected, the officials said. Bringing down the tariff on European auto exports was another sticking point for the Europeans, especially Germany, the largest E.U. economy. Mr. Trump imposed a 25 percent tariff on foreign cars and car parts in April. European automakers, which sent cars worth 38.5 billion euros ($45 billion) to the United States last year, have been suffering under those hefty rates. 'The agreement successfully averted a trade conflict that would have hit the export-oriented German economy hard,' Friedrich Merz, Germany's chancellor, said in a comment after the announcement. Mr. Trump also lowered the tariff rate on Japanese auto exports to 15 percent as part of the deal announced last week. But those exemptions have raised immediate concern among auto manufacturers elsewhere, including in the United States, Mexico and South Korea, which are still paying higher tariffs. Patrick Anderson, the chief executive of Anderson Economic Group, said the difference could lead to 'a cost penalty of thousands of dollars per vehicle for numerous models assembled in the U.S.' that use foreign parts. 'How can the administration square a 15 percent tariff on cars from Europe and Japan, while manufacturers in the U.S., Canada and Mexico are laboring under 25 percent tariffs?' he asked. Ms. von der Leyen acknowledged that the tariffs that will now prevail are much higher than the 2.5 percent that applied before the Trump administration came into office. But she also pointed out that the 15 percent rate that negotiators had managed to arrive at was much lower than what might have prevailed had no deal been reached. 'We should not forget where we came from,' Ms. von der Leyen said.
BreakingNews.ie
2 days ago
- Business
- BreakingNews.ie
Trump and von der Leyen agree EU-US deal on US President's Scotland visit
Donald Trump said the US and EU had agreed the 'biggest deal ever made' after a high-stakes meeting with Ursula von der Leyen on the second full day of his private visit to Scotland. The EU is set to face 15 per cent tariffs on most of its goods including cars, semiconductors and pharmaceuticals entering America rather than a 30 per cent levy previously threatened by the US President. Advertisement President of the EU Commission Ms von der Leyen said the agreement would provide 'certainty in uncertain times' for citizens and businesses, while Mr Trump hailed what he described as the 'biggest deal ever made'. The agreement will include '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 (€638 billion) over three years. The two leaders met at the US President's Turnberry golf resort in Ayrshire on Sunday to hammer out the broad terms of the agreement, the detail of which is due to be fleshed out in the coming weeks. Before their bilateral talks, which lasted around an hour, Mr Trump had said there was a '50-50' chance of the deal being reached as a number of the sticking points remained. Advertisement Following the meeting, he said: 'I think it's great that we made a deal today instead of playing games and maybe not making a deal at all … I think it's the biggest deal ever made.' Ms von der Leyen said: 'Today's deal creates certainty in uncertain times, it delivers stability and predictability for citizens on both sides of the Atlantic.' Speaking to journalists afterwards, she acknowledged there was 'tension' at the beginning of her meeting with the US President but said 'in the end, as we were successful, it's good and it's satisfactory.' Taoiseach Micheál Martin welcomed the 'clarity' the agreement brought to the transatlantic trade relationship and said the implications for exports from Ireland would be studied in the coming days. Advertisement Together, the EU and the US are a market of 800 million people. And nearly 44 percent of global GDP. It's the biggest trade deal ever ↓ — Ursula von der Leyen (@vonderleyen) July 27, 2025 'That is good for businesses, investors and consumers. It will help protect many jobs in Ireland,' he said. 'The negotiations to get us to this point have been long and complex, and I would like to thank both teams for their patient work. '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.' The agreement reached on Sunday evening looks to have averted the prospect of transatlantic trade war amid concerns that US tariff rates could damage the world economy. Advertisement However, uncertainty remains over American levies on steel, which Mr Trump has suggested remains subject to a global rate of 50 per cent. Ireland Taoiseach welcomes trade deal between EU and US Read More Ms von der Leyen said the steel sector would go back to 'historical quotas' like in the UK-US deal, with 'ring-fencing' to deal with global overcapacity. British Prime Minister Keir Starmer will meet the US President for bilateral talks at Turnberry on Monday, with Britain's trade agreement with Washington expected to be a key focus. The pact signed at the G7 summit last month left tariffs on UK steel at 25 per cent rather than falling to zero as originally agreed. Advertisement
Free Malaysia Today
2 days ago
- Business
- Free Malaysia Today
EU, US strike ‘biggest-ever' trade deal
President Donald Trump and EU chief Ursula von der Leyen seal a trade deal with a handshake at Trump Turnberry golf resort in Scotland. (AP pic) TURNBERRY : The United States and European Union on Sunday clinched what President Donald Trump described as the 'biggest-ever' deal to resolve a transatlantic tariff stand-off that threatened to explode into a full-blown trade war. Trump emerged from a high-stakes meeting with European Commission President Ursula von der Leyen at his golf resort in Scotland to announce that a baseline tariff of 15% would be levied on EU exports to the US. The deal, which the leaders struck in around an hour, came as the clock ticked down on an Aug 1 deadline to avoid an across-the-board US levy of 30% on European goods. 'We've reached a deal. It's a good deal for everybody. This is probably the biggest deal ever reached in any capacity,' said Trump. Trump said the 15% tariff would apply across the board, including for Europe's crucial automobile sector, pharmaceuticals and semiconductors. As part of the deal, Trump said the 27-nation EU bloc had agreed to purchase 'US$750 billion worth of energy' from the United States, as well as make US$600 billion in additional investments. Von der Leyen said the 'significant' purchases of US liquefied natural gas, oil and nuclear fuels would come over three years, as part of the bloc's bid to diversify away from Russian sources. Negotiating on behalf of the EU's 27 countries, von der Leyen had been pushing hard to salvage a trading relationship worth an annual US$1.9 trillion in goods and services. 'It's a good deal,' the EU chief told reporters. 'It will bring stability. It will bring predictability. That's very important for our businesses on both sides of the Atlantic,' she said. She said bilateral tariff exemptions had been agreed on a number of 'strategic products,' notably aircraft, certain chemicals, some agricultural products and critical raw materials. Von der Leyen said the EU still hoped to secure further so-called 'zero-for-zero' agreements, notably for alcohol, which she hoped to be 'sorted out' in coming days. Trump also said EU countries – which recently pledged to ramp up their defence spending within Nato – would be purchasing 'hundreds of billions of dollars worth of military equipment.' 'Best we could get' The EU has been hit by multiple waves of tariffs since Trump reclaimed the White House. It is currently subject to a 25% levy on cars, 50% on steel and aluminium, and an across-the-board tariff of 10%, which Washington threatened to hike to 30% in a no-deal scenario. The bloc had been pushing hard for tariff carve-outs for critical industries from aircraft to spirits, and its auto industry, crucial for France and Germany, is already reeling from the levies imposed so far. 'Fifteen percent is not to be underestimated, but it is the best we could get,' acknowledged von der Leyen. Any deal will need to be approved by EU member states – whose ambassadors, on a visit to Greenland, were updated by the commission Sunday morning. They were set to meet again after the deal struck in Scotland. German chancellor Friedrich Merz rapidly hailed the deal, saying it avoided 'needless escalation in transatlantic trade relations'. But German exporters were less enthusiastic. The powerful BDI federation of industrial groups said the accord would have 'considerable negative repercussions' while the country's VCI chemical trade association said the accord left rates 'too high'. The EU had pushed for a compromise on steel that could allow a certain quota into the US before tariffs would apply. Trump appeared to rule that out, saying steel was 'staying the way it is', but the EU chief insisted later that 'tariffs will be cut and a quota system will be put in place' for steel. 'The big one' While 15% is much higher than pre-existing US tariffs on European goods, which average around 4.8%, it mirrors the status quo, with companies currently facing an additional flat rate of 10%. Had the talks failed, EU states had greenlit counter tariffs on US$109 billion (€93 billion) of US goods including aircraft and cars to take effect in stages from Aug 7. Trump has embarked on a campaign to reshape US trade with the world, and has vowed to hit dozens of countries with punitive tariffs if they do not reach a pact with Washington by Aug1. Asked what the next deal would be, Trump replied: 'This was the big one. This is the biggest of them all.'
The Independent
2 days ago
- Business
- The Independent
Trump and von der Leyen agree EU-US deal on US President's Scotland visit
The US and European Union have agreed a trade deal on Donald Trump's visit to Scotland, bringing months of difficult negotiations to a close. The bloc will face 15% tariffs on most of its goods including cars, semiconductors and pharmaceuticals entering America rather than a 30% levy previously threatened by the US President. President of the EU Commission Ursula von der Leyen said the agreement would provide 'certainty in uncertain times' for citizens and businesses, while Mr Trump hailed what he described as the 'biggest deal ever made'. They also agreed 'zero for zero' tariffs on a number of products including aircraft, some agricultural goods and certain chemicals, Ms von der Leyen said. The two leaders met at the US President's Turnberry golf resort in Ayrshire on Sunday to hammer out the broad terms of the agreement, the detail of which is due to be fleshed out in the coming weeks. Before their bilateral talks, which lasted around an hour, Mr Trump had said there was a '50-50' chance of the deal being reached as a number of the sticking points remained. Following the meeting, he said: 'I think it's great that we made a deal today instead of playing games and maybe not making a deal at all … I think it's the biggest deal ever made.' Ms von der Leyen said: 'Today's deal creates certainty in uncertain times, it delivers stability and predictability for citizens on both sides of the Atlantic.' Irish Taoiseach Micheal Martin welcomed the 'clarity' the agreement brought to the transatlantic trade relationship and said the implications for exports from Ireland would be studied in the coming days. 'That is good for businesses, investors and consumers. It will help protect many jobs in Ireland,' he said. 'The negotiations to get us to this point have been long and complex, and I would like to thank both teams for their patient work. '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.' The development on Sunday evening looks to have averted the prospect of transatlantic trade war amid concerns that US tariff rates could damage the world economy. However, uncertainty remains over American levies on steel, which Mr Trump has suggested remains subject to a rate of 50%.
