European Union member states have voted to approve counter-tariffs on €93 billion of US goods, which could be imposed should the bloc fail to reach a trade deal with Washington, EU diplomats said.
The European Commission had said yesterday its primary focus was to achieve a negotiated outcome with the US to avert 30% U.S. tariffs that US President Donald Trump has said he will apply on 1 August.
The commission said it would press on in parallel with plans for potential countermeasures, merging two packages of proposed tariffs of €21bn and €72bn into a single list and submitting this to EU members for approval.
No countermeasures would enter force until 7 August.
So far the EU has held back from imposing any countermeasures, despite Mr Trump’s repeated announcements of tariffs, the broadest of which have been postponed.
EU member states authorised the first package of countermeasures in April, but these were immediately suspended to allow time for negotiations.
The EU and United States appear to be heading towards a possible trade deal, according to EU diplomats, which would result in a broad 15% tariff on EU goods imported into the US, mirroring a framework agreement the US struck with Japan.
Mr Trump would still need to take any final decision.
Under the outlines of the potential deal, the 15% rate could apply to sectors including cars and pharmaceuticals and would not be added to long-standing US duties, which average just under 5%.
There could also be concessions for sectors such as aircraft, lumber as well as some medicines and agricultural products, which would not face tariffs, diplomats said.
The US does not, however, appear willing to lower its 50% tariff on steel.
The Tánaiste and Minister for Foreign Affairs and Trade said the EU remains focused on reaching a negotiated deal with the US.
Speaking after the measures were adopted, Simon Harris said: “The Government continues to strongly support Commissioner [Maroš] Šefčovič in his efforts to strike a deal in the coming days.
“However, throughout the negotiations we have been clear that while we would engage in good faith with the US it was also necessary to prepare rebalancing measures should negotiations not be successful.
“This morning the 27 EU Member States have continued with that approach. This is not escalatory – it’s a continuation of our calm, measured preparation. Our objective remains a mutually beneficial deal by 1 August.
“While we were successful in removing some key Irish sensitivities following intensive consultation with the European Commission, this package of rebalancing measures if implemented would have an adverse effect on European and Irish business.
“However let me be clear, while we do not wish to see this list ever come into effect the EU must prepare for all eventualities and must be enabled to negotiate with the United States from a position of strength.
“That is why it is now long past time for a deal.”
The Government’s initial analysis of Ireland’s exposure to the additional €72 billion of imports included on the new consolidated EU list has been reduced by approximately €2.4bn from €12.6bn to €10.2bn.
Importantly, nearly €1bn of the products that have been removed are products that Ireland has a high trade dependency on the US, or where Ireland accounts for a high share of total EU imports from the US.
This represents almost half of the value of sensitive import dependent products, which Ireland specifically requested to be removed.
Furthermore, 30 agri-food products have been removed with a value of €33m. These include some sensitive products such as pure-bred horses, sugar and molasses and some chocolate products.
Huge level of uncertainty ahead of tariff deadline
The chairperson of the Irish Fiscal Advisory Council said that there is a huge level of uncertainty ahead of the US tariff deadline next week.
Seamus Coffey said trade with the US makes up a significant component of Irish trade and that Irish businesses have used resources to develop relationships with the US which takes time.
Speaking on RTÉ’s Today with Claire Byrne, he said that most of the anticipated tariffs are in concentrated exports which will impact the pharmaceutical sector and a small number of companies.
Mr Coffey said that the risks being faced are quite significant particularly for domestic sectors and that the change could make sales more difficult.
He added that the uncertainty involved is also having an impact.
Mr Coffey said that since the tariff announcement some months ago, a lot of businesses are in a state of pause so significant decisions are being delayed which will have an impact and create problems.
