Taoiseach Micheál Martin has said the new trade agreement reached between the US and EU means a “damaging trade war” has been avoided.
Mr Martin also said there is “much to be negotiated” following what he termed a “framework agreement”.
Speaking this afternoon, Mr Martin said it “opens up the prospect of more significant strategic collaboration between the US and Europe on quite a number of issues”.
“It also avoids further escalation, or indeed a trade conflict, which would be very, very damaging to the economies of the United States and of the European Union,” he said.
“It’s important to say that Europe never sought tariffs, or never sought to impose tariffs, and fundamentally, we are against tariffs: we believe in an open trading economy.”
Mr Martin said it is a very different situation than before 1 April.
“New realities are in play and so at a broader level, the stability and predictability that this agreement brings is important for businesses, is important for consumers and indeed patients when it comes to the manufacturing and distribution of medicines,” he said.
“In essence, we have avoided a trade conflict here which would have been ruinous, which would have been very damaging to our economy, and to jobs in particular.
“The challenge now for Europe is to work on its own inefficiencies, to reduce barriers within the single market, to press ahead more ambitiously and more proactively on trade diversification and trade deals with other countries that would facilitate that market diversification that is required.
“Meanwhile, there is much to be negotiated in the aftermath of this framework agreement.”
Asked about mixed reactions to the deal in Europe, Mr Martin said: “Nobody is welcoming tariffs with open arms.
“I think we’ve been consistent in saying that we don’t agree with tariffs, that we prefer if there weren’t tariffs, but we have to deal with realities.
“I understand people criticising, but given the balance and the options here… in my view, I would appreciate the work of the (European) Commission in this regard, and the avoidance of a trade war is preferable, in my view, and that’s the key issue.”
EU negotiated US tariff deal with ‘hands tied behind back’, say exporters
The EU negotiated a trade deal with the US with their “hands tied behind their back”, the Chief Executive of the Irish Exporters Association (IEA) has said.
The agreement struck yesterday evening 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.
Speaking on RTÉ’s News at One, IEA Chief Executive Simon McKeever said that a lack of spending in defence and security had left the EU in a precarious position, and was critical of the deal agreed.
“I think the EU was backed into a very difficult negotiating position because of the lack of investment in defence and security spending over the last number of years. It’s totally dependent on the US in that space,” he said.
“I don’t think it’s a good deal. I don’t think it’s a great deal and for Irish businesses, they’re now faced with a 15% tariff they weren’t faced with before and they’ll need to deal with that.
“I think that we were negotiating with one if not two hands tied behind our back. I don’t think we were in a very strong position because of the defence issue.”
Mr McKeever called on Tánaiste Simon Harris to organise the trade forum, and said that he had requested a tariff adjustment fund to be established to help Irish businesses cope with impending tariffs.
“Companies are going to need help. We have called for a tariff adjustment fund, which is based on the Brexit adjustment reserve and was brought out in 2021,” he said.
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“Irish companies are going to need time to get to grips with this … I’m calling on Simon Harris to please get the trade forum together tomorrow or on Wednesday, because we need to get back to our members with this,” he added.
Mr McKeever said that he felt US President Donald Trump had used the war in Ukraine as leverage in the negotiations.
“What was hampering the European Union was its dependence on the US for defence and security. You’ve got a war on the borders of the European Union in Ukraine going on, and they need to keep the Americans engaged in that,” he added.
Europe ‘capitulated’ on US tariff deal, says Ibec CEO
Earlier, CEO of Ibec Danny McCoy described the deal as a “capitulation” by Europe.
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”.
Read more:
Tariffs aren’t good news but it could have been much worse
Orbán says Trump ‘ate’ EU chief ‘for breakfast’ in trade talks
“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.
Watch: ‘Not a great day’ for European trade – Ibec CEO
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.
Trade deal ‘a significant challenge for Irish agri-sector’ – IFA
The Irish Farmers’ Association (IFA) has said the EU-US trade deal “represents a significant challenge for the Irish agri-sector on a number of fronts”.
IFA President Francie Gorman said that “given Ireland’s reliance on the US market, both in agriculture and beyond, its impact will be significant on Irish farm families, both directly and indirectly”.
Ireland exported nearly €2 billion worth of food and drink products to the US last year.
That figure included €830 million worth of dairy products, and €900 million in drinks – predominantly whiskey.
The IFA welcomed a possible reduction in the tariff on Irish butter entering the US.
Mr Gorman said that “prior to the introduction of tariffs by the Trump administration in April, Irish butter was subject to a tariff rate of about 16%.
“Initial reports indicate that the proposed new 15% tariff rate will be a replacement for existing tariffs and will not be ‘stacked’ on existing tariffs.
“Should this be the case, it would reduce the impact of the proposed new tariffs on the Irish dairy sector significantly.”
However, the IFA President said the UK, which struck a 10% tariff deal with the US, “now benefits from a lower tariff than Ireland, making them more competitive in the US market compared to Irish goods”.
“It also means a differential tariff between exports north and south of the border. Furthermore, many farm households rely on employment from US multinationals, which may also be negatively impacted by these new tariffs.”
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