Latest news with #IrishExportersAssociation
Irish Examiner
3 days ago
- Business
- Irish Examiner
Calls for adjustment fund as some firms face new 15% US tariff rate
The Irish Exporters Association has called for a tariff adjustment fund to be established in light of the new trade deal between the EU and the US, as small-margin companies will find it difficult to handle the new 15% tariff and may have to 'withdraw from the US'. On Sunday, EU Commission president Ursula von der Leyen agreed a deal with US president Donald Trump which would see imports to the US from the bloc hit with a 15% tariff. This is up from the 10% currently in place but lower than the 30% Mr Trump recently threatened to impose should a deal not have been reached. A baseline tariff rate of 15% on EU goods imported into the US would apply to most goods including 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. Discussions are continuing regarding any tariff exemptions for the wines and spirits sectors in the framework trade deal between the EU and the US, a senior European Commission official said on Monday. Mr Trump has previously threatened to impose 200% tariffs on alcohol from the EU. The deal also includes $600bn (€510bn) of EU investments in the US and significant EU purchases of US energy and military equipment. Chief executive of the Irish Exporters Association Simon McKeever said: 'I don't think it's a great deal' for the EU, adding its 'negotiating position has been hampered by its lack of investment in defence and security over the last number of years'. 'I think we've been negotiating with one, perhaps both hands tied behind our back,' he said. This is not a trade deal, as is a traditional trade deal. This is a deal with the resident of the US. It's a deal done with a very erratic individual who seems to change his mind all the time. This is a deal that could change or be torn up at any point. Mr McKeever added the deal raises a number of other questions, particularly when it comes to competing with the UK, which has a tariff rate of 10%. 'Where does this leave Ireland as a competitor to the UK for both exports and foreign direct investment projects now. Obviously, still being in the European Union is better for us, but what about Northern Ireland?' he said. Mr McKeever called for a tariff adjustment fund modeled on the Brexit adjustment reserve back in 2021 to help businesses who could be significantly impacted by this deal. He said small-margin exporters may not be able to handle this 15% tariff and might 'withdraw from the US market and chase sales elsewhere'. Chief executive of the Irish Small and Medium-sized Enterprise Association (Isme) Neil McDonnell said distillers, artisan food and confectionary companies were the ones most concerned about these tariffs prior to the deal being announced. He said this deal was going to compound problems for smaller businesses exporting to the US, given the euro has also strengthened against the dollar in recent months. Higher-margin producers might be able to manage the tariff 'but only time will tell where they are', Mr McDonnell said. While exporters and small businesses have concerns about the deal, the chief executive of the American Chamber of Commerce Ireland Paul Sweetman called the deal an 'important milestone in EU-US relations'. 'While some details remain to be clarified, a 15% tariff level is not an optimum trade environment and will be a significant burden to businesses already managing a 10% tariff. However, the agreement does bring a new stability and allows business decisions to be made with greater certainty,' he said.
RTÉ News
6 days ago
- Business
- RTÉ News
Ireland faces 15% tariff reality as EU-US deal takes shape
The EU and US are edging closer to a trade deal revolving around tariffs of 15% imposed on European goods. The details of any agreement will be critical. Recent discussions have come close to an agreement only to be derailed at the last minute by the White House - and that could happen again. Based on what is known so far, the EU-US deal would include a baseline tariff of 15%. Some existing tariffs would be folded into that 15% meaning it would be an all-in tariff. For example, it would include the existing "most favoured nation" duties of 4.8% which exist currently under World Trade Organisation rules. However, there would be some exceptions. The punitive 50% rate on steel and aluminum, introduced by US President Donald Trump on exports from the EU, would remain in place. It is understood that what may emerge is an agreement between the two sides that sees the threatened 1 August cliff edge of 30% tariffs on EU goods removed. It is now long past time to strike a deal. Tánaiste Simon Harris says he remains "cautiously optimistic" a deal could be reached for a "positive future EU-US trading relationship within the coming days". He adds: "It is now long past time to strike a deal." Under the framework, which is being negotiated, the US would have some immediate implementation steps, but some aspects would still need further negotiations. In a boost for Irish exporters, it is expected aircraft, medical devices and spirits would be covered by a zero for zero tariff arrangement. The critical part for Ireland is what would happen to exports of pharmaceuticals and computer chips to the US. At present, there are no tariffs on either sector while the US holds an investigation on national security grounds into imports of those goods. However, indications are that the investigation may result in the EU seeing a 15% tariff imposed on both pharmaceuticals and computer chips once the process concludes. If that rate is introduced, it would have significant consequences. Pharmaceuticals are Ireland's biggest export to the US and were valued at €44bn last year. Any company faced with a new tariff is going to have to figure out how it will be paid. Exporters will be asking whether they can make internal savings, adjust supply chains or pass it on to customers? Donald Trump told Taoiseach Micheál Martin on St Patrick's Day that Ireland "took" American pharmaceutical companies. But despite Mr Trump's comments, no US drug manufacturer with an operation in Ireland has so far threatened to relocate to America. The baseline tariff of 15% for many companies would have significant effects. Simon McKeever, CEO of the Irish Exporters Association, said his organisation would be looking for a "tariff adjustment fund" largely based on the Brexit Reserve Fund of €1bn, which was introduced to help companies when the UK left the EU. While there may be relief if a deal is agreed it would be a much worse trading environment than Irish companies faced last year. Tariffs are fundamentally bad for an export-led economy such as Ireland. Globally, the removal of trade barriers over recent decades has lifted millions of people in developing countries out of poverty. But perhaps the most damaging aspect of the trade war is that it has created enormous uncertainty and put many investments on hold in Ireland and elsewhere. If a deal is agreed companies will know the future landscape. And that is likely to unlock investments which had been put on hold.
Irish Examiner
01-07-2025
- Business
- Irish Examiner
Stronger euro an 'extra cost' for exporters
The strength of the euro against the dollar is an 'extra cost' to Irish exporters on top of US tariffs, the head of the Irish Exporters Association has said as the bloc's single currency hits a near four-year high. The euro continued to gain against the dollar on Tuesday reaching over $1.18 which is the highest it has been since early September 2021. Only recently, in the middle of January was the dollar trading at near parity with the euro at $1.02. These gains mean the euro is on the verge of its longest winning streak against the dollar in more than two decades. However, as a small open economy which is particularly reliant on exports - particularly exports to the US - Ireland is disadvantaged when the euro is strong as it makes Irish exports more expensive to buy in other countries. Conversely, it does make imports cheaper. Speaking to the Irish Examiner Simon McKeever, chief executive of the Irish Exporters Association, said the strength of the euro is an 'extra cost on top of the tariffs' that exporters now have to deal with adding that the situation may deteriorate further as the dollar is going to get weaker. "You're looking at a pretty significant move this year alone,' he said in regards to the currency markets. "I don't think it was foreseen in the cost of doing business, but it certainly isn't helpful.' Mr McKeever said in his anecdotal conversations with members there is a sense that the 'level of optimism' that was present at the start of the year 'has dropped a little bit over the last while'. He pointed to trade statistics from recent months that show while exports have been surging in recent months, if you 'strip out the USA from our overall trade stats, there's been no growth'. According to the Central Statistics Office (CSO), between January and April this year, Irish exports have increased 51% to just over €111bn. However, this largely as a result of a €37.9bn, or a 170%, increase in exports to the US compared to the same period last year. Trade with Britain dropped 15% while trade with the rest of the world - excluding the EU, UK, and US - was down 7%. Trade with the EU was up 5%. Mr McKeever said: I don't think our export performance has been stellar. In relation to the international trading environment, Mr McKeever said that the US has made it clear that 'it is not a low-tariff economy anymore' and it is likely that the 10% tariff on imports on goods coming into the country is going to be the minimum. Analysts also increasingly see the euro rallying toward $1.20 in the coming months. European Central Bank Vice President Luis de Guindos said Tuesday that while a move to $1.20 is 'acceptable', further gains would make policy makers' task more complicated. The US dollar is the world's reserved currency and as a result most trade, particularly in commodities, is conducted via the dollar. Given the potential for rising oil prices, a strong euro would actually be beneficial in this area as imports would be slightly cheaper. The euro's rally has been underpinned by the long-running slide for the dollar, with fresh momentum added in recent weeks from weaker US data and growing conviction that the Federal Reserve is preparing to ease policy more aggressively than the European Central Bank. Attention is also turning to US data due this week including ISM manufacturing, job openings and non-farm payrolls. Additional reporting Bloomberg
Euronews
05-03-2025
- Business
- Euronews
Here's why Trump's tariffs could hit Ireland's pharma sector hardest
US president Donald Trump has recently threatened to impose a 25% tariff on the EU, significantly escalating global trade tensions. Although these potential tariffs would impact the whole of the EU, there are additional concerns about the effect on Ireland and Irish exports. The Irish pharmaceutical industry is likely to be one of the hardest hit, in the case of US tariffs. In 2024, Ireland exported €72.6 billion worth of goods to the US, which was an increase of €18.6bn from the previous year, according to the country's Central Statistics Office (CSO). Supriya Kapoor, associate professor of finance at Trinity College Dublin, told Euronews: 'Relative to the other EU countries, Ireland is more exposed to tariffs because it exports proportionately more to the US. Pharmaceuticals and medical devices make the most of these exports." 'And much of this pharmaceutical production is in Ireland for American companies such as Pfizer, Eli Lilly, Johnson and Johnson, to name a few.' US tariffs on the EU could therefore have a significant impact on the Irish economy and gross domestic product (GDP) by making exports to the US more expensive, which could in turn contribute to lower demand. Supply chain disruptions Retaliatory tariffs from the EU could exacerbate supply chain issues for pharmaceutical firms. The Irish Exporters Association has issued a warning to companies to start preparing for a possible trade war. "People need to take this seriously. Any idea that Donald Trump is not going ahead with tariffs is a misconception. People need to start to look at supply chains and see where they are exposed," Simon McKeever, the CEO of the Irish Exporters Association, told RTÉ. Pharma products are generally supposed to be exempt from tariffs, according to a 1994 World Trade Organisation (WTO) agreement, devised to ensure better access to medicines globally. However, Trump already has a history of pulling out of other key global agreements, such as the 2015 Paris Agreement on climate change. Trump's 25% tariffs on all imported goods from Mexico and Canada already went into effect on Tuesday, along with higher tariffs on Chinese imports. Energy resources from Canada will have a lower 10% tariff. Targeted tariffs could have a higher impact on Ireland Targeted US tariffs on certain EU goods such as cars or pharmaceutical products could potentially affect the EU and Irish economy more than blanket tariffs, according to Oxford Economics. The company said: 'Our industry-level modelling suggests that the pharmaceutical and high-tech industries would be the most affected. Similarly, smaller, less diversified economies are more exposed. We estimate that Ireland and Central and Eastern European (CEE) economies will experience the largest hit." 'Opting for targeted tariffs instead of blanket tariffs could exacerbate the impact on some EU industries. We simulated a scenario with 25% tariffs only on metals, cars, and pharmaceuticals. We found similar results to our blanket tariffs scenario but with stronger effects for Ireland and Denmark due to pharma, and for Germany and Slovakia due to automotive.' Paying for intellectual property Many US pharmaceutical companies set up manufacturing facilities in Ireland due to its low corporate tax rate, although they are linked to headquarters in the US. The Irish firms then pay a royalty fee to US parent companies, which allows them to use formulas to make products. This partly explains why Ireland imports far more services from the US than it exports, as is not the case with goods. Trump's 25% tariff threat currently relates to goods, although it's possible these set-ups could be targeted by the new administration.
