Latest news with #Ibec
Yahoo
2 days ago
- Business
- Yahoo
Trump tariffs cause Ireland's economy to shrink for first time in two years
Ireland's economy has shrunk for the first time in almost two years after Donald Trump's tariff blitz sparked a sharp drop in corporate activity. New trade figures show that Irish gross domestic product (GDP) shrank 1pc in the three months to June 30. This was a marked slowdown from the previous quarter between January and March, when growth hit 7.4pc as companies accelerated exports to get ahead of the US president's 'liberation day' tariffs announcement on April 2. After pausing his initial wave of tariffs, Mr Trump on Monday agreed a deal with Brussels that will slap a 15pc tax on EU exports to the US, threatening to deepen Ireland's economic slowdown further. Simon Harris, Ireland's deputy prime minister, acknowledged that the 15pc tariff was 'regrettable', saying the government would have to assess its 'implications'. Almost one third of Irish exports are shipped to the US, accounting for 12pc of GDP. Pharmaceuticals, one of the most powerful engines of the Irish economy, account for more than 60pc of this, last year totalling €44bn (£39bn). The deal's impact on the sector remains unclear. Mr Harris said the Irish government's understanding was that European drug makers would face a tariff of no more than 15pc, even if Mr Trump follows through on his threat of introducing higher worldwide pharma tariffs. 'The EU will continue to work with the US to underline the closely integrated nature of the EU and US pharmaceutical sector,' he said. Mr Harris said the EU had also secured a 'zero for zero' tariff rate for the aviation industry and some agricultural products and chemicals. But Irish business groups branded the US-EU trade deal a 'capitulation'. 'It's quite tragic that we are in this situation,' Danny McCoy, the chief executive of the Irish Business and Employers Confederation (Ibec), told Irish television. 'If Europe had equal strength, it could have confronted the United States. 'US businesses are now favoured coming into Europe without tariffs, and our European businesses are facing 15pc.' Micheál Martin, the Taoiseach, sought to defend the deal, saying it had ensured that businesses had clarity and certainty, and would protect Irish jobs. But former taoiseach and Brexit critic Leo Varadkar attacked the agreement, and questioned whether Mr Trump would stick with it. 'This will mean fewer EU exports to the US and higher prices for Americans,' he said on social media. 'The only thing it's better than is no deal at all and that's only if it sticks.' Mr McCoy agreed with Mr Martin that businesses at least now knew where they stood. 'The good news, if there is good news on this, is that uncertainty may be dissipating and that's going to be important for people in business to make decisions,' he said. But 'in time, this will lead to a lot of changes in terms of businesses having to look at different markets than the United States or suffer significant losses trading with the United States'. Ibec urged the Irish government to support businesses that have to adjust to the new conditions. Mr Martin said the government, which has been building up a pool of public funds to support industries through crises, would take time to weigh up the tariffs' impact. '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. 'The agreement is a framework and there will be more detail to be fleshed out in the weeks and months ahead.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Irish Examiner
2 days ago
- Business
- Irish Examiner
We may need 'product-by-product negotiations' after US-EU trade agreement, says Taoiseach
There is still 'much to be negotiated' in the aftermath of the tariff agreement between the US and the EU, Taoiseach Micheál Martin has warned. He stated that this could mean 'product-by-product negotiations'. Mr Martin also suggested that while no one is 'welcoming tariffs with open arms', the deal is better than an all-out trade war. European Commission President Ursula von der Leyen and US President Donald Trump confirmed that a 15% tariff will apply on EU goods entering the US. The EU further agreed to buy $750bn worth of US energy and to invest $600bn in the US economy. Ms von der Leyen stated that pharmaceuticals are included in the 15% tariff but admitted that any future decision would be 'on a different sheet of paper'. The Taoiseach said the agreement 'avoids a trade conflict which would be very, very damaging', arguing that it brings 'stability and predictability'. However, he also contended that this is not the end of the road. 'There is much to be negotiated in the aftermath of this framework agreement, in some sectors, product by product negotiations,' he said. 'We will continue to try and add to the agreement for the benefit of European workers, consumers, and patients.' The agreement has come in for sharp criticism in some quarters. In France, prime minister Francois Bayrou said it was a 'sombre day' and stated that the EU had 'resigned itself to submission'. At home, Ibec CEO Danny McCoy accused the EU of 'capitulation'. When these statements were put to the Taoiseach, he stated that Ibec and other EU member states would not want a 'trade war'. However, he added that 'nobody is welcoming tariffs with open arms'. 'We've been consistent in saying that we don't agree with tariffs, we'd prefer if there weren't tariffs, but we have to deal with realities,' he said. 'I understand people criticising, but given the balance and the options here… I would appreciate the work of the commission in this regard and the avoidance of a trade war is preferable.' Mr McCoy said that the deal was 'clearly' the EU submitting to the US and predicted there would be 'many twists and turns yet'. He said: The real prize here is certainty, but we don't know whether we've got certainty with Donald Trump. 'If we were certain it was 15%, we could end up coping quite well with this. We would redirect where our trade was going from.' Elsewhere, former taoiseach Leo Varadkar stated the deal struck between the EU and the US was better than if there was 'no deal at all', adding, 'that's only if it sticks'. In a post on X, Mr Varadkar noted that a 'good trade deal is one that increases trade flows and reduces prices for consumers'. Mr Varadkar told the Irish Examiner that he believes Mr Trump will target pharmaceuticals further. However, he admitted that he is 'not overly concerned' about what it will mean for Irish finances. 'It'll take time to have an impact, and we are well insulated with such a big surplus,' he said. 'We need to work on contingencies, in particular, selling our products to the rest of the world with which we have stable trading relationships, such as the EU, UK, Japan, South Korea, Latin America.'
RTÉ News
2 days ago
- Business
- RTÉ News
Europe 'capitulated' on US tariff deal, says Ibec CEO
CEO of Ibec Danny McCoy has described the deal reached by the European Union and the United States on trade tariffs as a capitulation by Europe. The agreement will see EU exports taxed at 15% in a bid to resolve a transatlantic tariff stand-off that threatened to explode into a full-blown trade war. The deal was announced following a meeting between European Commission President Ursula von der Leyen and US President Donald Trump. Speaking on RTÉ's Morning Ireland, Mr McCoy said: "The good news, if there is good news on this, is that uncertainty may be dissipating and that's going to be important for people in business to make decisions." However, he said the deal was "fairly punishing" for the EU and added "Europe has capitulated". "It's quite tragic that we are in this situation. If Europe had equal strength, it could have confronted the United States," he said. Mr McCoy said that while the EU is a "strong economic zone", its weakness is that "we cannot defend the European Union". Under the deal, the EU pledged to buy US military equipment and European companies are to invest $600 billion in the US over President Trump's second term. "US businesses are now favoured coming into Europe without tariffs and our European businesses are facing 15%. "In time, this will lead to a lot of changes in terms of businesses having to look at different markets than the United States or suffer significant losses trading with the United States," Mr McCoy said. He also raised concerns for Ireland that goods from the UK entering the US will have a smaller tariff rate of 10%. The US and UK agreed to a trade deal in early May, which included a baseline 10% tariff on most goods exported to the US, with certain exemptions. The agreement includes goods being exported from Northern Ireland. EU-US tariffs deal gives clarity, says minister Minister for Enterprise Peter Burke said that the deal brings clarity and avoids a trade war that could have resulted in 30% tariffs on EU goods. Speaking on the same programme, he said: "It gives certainty which is key, but there's three key areas I think we have to focus on. "We are about four days away, which would have been a 30% tariff for the US and that would have been very significant for all our companies right across the country. "Secondly, I think it avoids a direct trade war because we're very much aware that there was about €100 billion of countermeasures that were ready to be deployed, which would have a very significant effect on Ireland and as well on the north-south economy." Mr Burke added that "the devil is in the detail and we do need to see those key areas, those carve-outs that have been specifically called out by the President of the Commission yesterday". He said that the Irish Government "is very, very clear and has been that tariffs are bad" and said 15% is a "very significant tariff". In relation to pharmaceuticals, Mr Burke said that the understanding is that the 15% tariff "will be a ceiling" subsequent to the US investigation. "Pharmaceuticals are very complex, a lot of the product that is exported over to the US is not a complete product. Almost 70% of it is components of the final product that will come together. "And that's why we do need to ensure that we have a very keen rate to ensure we incentivise innovation in that sector because that's so important for the global economy. "We've about 100,000 employees in Ireland, 130 billion exports in the life science sector and the Government will be bringing forward a separate life science strategy later on this year, which will be key in continuing the investment and offering a very competitive proposition from Ireland's perspective," Mr Burke added.
Irish Times
2 days ago
- Business
- Irish Times
EU-US trade deal represents ‘substantial burden' for Irish businesses
The trade deal struck by the European Union and the United States represents a 'substantial burden' for many industries, and the most exposed sectors will require Brexit-style supports, business lobby Ibec has said. 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 deal 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. Ibec chief executive Danny McCoy said the agreement 'brings an end to a significant amount of uncertainty' for some businesses. However, he added that a 15 per cent tariff 'still represents a substantial burden for many industries'. READ MORE 'Sectors which rely heavily on the US market and operate within small margins, will once again be significantly impacted by an additional 5 per cent tariff, on top of what they have already had to absorb over the past several months and well in excess of the 1 per cent effective tariff which existing before April,' he said. 'Our message to the Government, as it was with the 10 per cent tariff, is that the most exposed sectors will require support similar to the interventions provided as a response to Brexit.' Mr McCoy noted the finer details of the deal are still emerging. 'These details will be critically important for Ireland,' he added. The European Commission, 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. 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. Chambers Ireland chief executive Ian Talbot said certainty is 'critical for businesses' and that the impact of uncertainty over the past couple of months has been seen in terms of investment. 'While tariffs are never welcome news for businesses on either side of the Atlantic, reaching an agreement – however imperfect – is preferable to no deal,' he said. 'It at least allows companies to plan and adapt in the short term. 'Any clarity that can be provided – even if preliminary – lays the foundation for further negotiation and incremental progress on the tariffs that now exist. 'Efforts should be made to help businesses to adapt. The EU and Irish Government should work to create a fund to support viable businesses adapt to new tariffs and also to ensure potential arbitrage issues with Northern Ireland are clearly understood and addressed.' BusinessEurope president Fredrik Persson welcomed the deal, which he said 'prevents a tariff escalation that would be extremely harmful to businesses and consumers on both sides'. 'We still need to examine the details and hope that a solution is soon found for important sectors that appear to be excluded from the deal,' he said. 'This will be critical to bringing the relationship to a more stable ground. Certainty and predictability are key for companies to invest and generate additional value on both sides of the Atlantic.'
Irish Examiner
3 days ago
- Business
- Irish Examiner
EU-US trade deal: Business groups welcome certainty but say 15% tariff 'still substantial burden'
Business groups have tentatively welcomed the framework trade agreement reached between the EU and the US, as it brings more certainty for firms, but the 15% tariff on imports to the US 'still represents a substantial burden for many industries'. On Sunday, US president Donald Trump met with EU Commission president Ursula von der Leyen at his golf course in Scotland to finalise a framework trade deal with the EU. The agreement will see the US impose 15% tariffs on imports from the bloc. This is up from the 10% currently in place, but is lower than the 30% Mr Trump threatened to impose from August 1 should a deal not have been reached. Trade between the EU and the US accounts for almost a third of global trade. Speaking after the meeting, Mr Trump said: 'I think this is the biggest deal ever made.' Ms von der Leyen said the deal will 'bring stability, it will bring predictability'. Ms von der Leyen defended the trade deal as 'the best we could get', adding that it was not to be underestimated given the looming threat of 30% tariffs. A baseline tariff rate of 15% on EU goods imported into the US would apply to cars, semiconductors and pharmaceutical goods, Ms von der Leyen said. Meanwhile, a zero-for-zero tariff rate had been agreed for certain strategic products, including aircraft and aircraft parts, certain chemicals, and certain generic drugs. No decision has been made on a rate for wine and spirits. The deal also includes $600bn of EU investments in the US, along with EU purchases of US energy and military equipment. Ibec: Brexit-style supports needed Ibec chief executive Danny McCoy said the agreement brings an 'end to a significant amount of uncertainty for some businesses'. 'However, a 15% tariff still represents a substantial burden for many industries. 'Sectors which rely heavily on the US market, and operate within small margins, will once again be significantly impacted by an additional 5% tariff on top of what they have already had to absorb over the past several months, and well in excess of the 1% effective tariff which existed before April." He added: 'Our message to the Government, as it was with the 10% tariff, is that the most exposed sectors will require support similar to the interventions provided as a response to Brexit. Chamber Ireland: Viable firms need tariff supports Chamber Ireland welcomed the agreement on trade tariffs, with its chief executive Ian Talbot stating: 'Certainty is critical for businesses, and we've seen the impact of uncertainty over the past couple of months in terms of investment. 'While tariffs are never welcome news for businesses on either side of the Atlantic, reaching an agreement — however imperfect — is preferable to no deal. It, at least, allows companies to plan and adapt in the short term.' Mr Talbot also called for the EU and the Government to create a 'fund to support viable businesses in adapting to new tariffs', and also to ensure 'potential arbitrage issues with Northern Ireland are clearly understood and addressed'. This is the latest deal Mr Trump has reached with a few countries around the world before his August 1 deadline. Agreements with the US have also been reached with Britain, Japan, Indonesia, and Vietnam, but Mr Trump's administration has failed to deliver on a promise of '90 deals in 90 days'. He has periodically railed against the EU, saying it was 'formed to screw the US on trade'. Mr Trump said that the EU wanted 'to make a deal very badly' and said, as he met Ms von der Leyen, that Europe had been 'very unfair to the US'. His main bugbear is the US merchandise trade deficit with the EU, which reached $235bn in 2024, according to the US Census Bureau data. The EU points to the US surplus in services, which it says partially redresses the balance. Mr Trump also talked about the 'hundreds of billions of dollars' that tariffs were bringing in. Additional reporting Reuters
