A 15% tariff rate is “challenging” but preferable to a 30 per cent rate, which would have “closed the market” in the United States, according to the Minister for Enterprise, reports Breaking News.
Peter Burke stated that the EU-US agreement avoids both a potential trade war and EU retaliatory measures, which could have had consequences for the all-island economy.
He said “the devil is in the detail” of the trade deal that was concluded on Sunday by Donald Trump and European Commission President Ursula von der Leyen in Scotland, reports Breaking News.
“We had a lot of modelling carried out on the various different options, and some were very perverse, that would have closed the market if you had over a 30 per cent tariff with a stacking mechanism,” Mr Burke told RTÉ Radio.
“The key thing is that there will be a number of carve outs. Obviously, aviation has been cited as zero-for-zero, but also in relation to agrifoods and potentially spirits,” reports Breaking News.
Under the deal, most EU exports to the US—such as cars, semiconductors, and pharmaceuticals—will face a 15 per cent tariff, while “zero for zero” tariffs will apply to certain goods like aircraft, some agricultural products, and selected chemicals. The EU will also commit to buying $750 billion (€643 billion) worth of US energy over the next three years.
Mr Burke said that, to his knowledge, the 15 per cent tariff applied to pharmaceuticals would be the highest possible rate, reports Breaking News.
He added: “I think the president of the Commission has been very clear that 15 per cent will be a ceiling.”
It remains uncertain whether the deal, reached five days before Mr Trump’s proposed 30 per cent tariff would have taken effect, will require Ireland to invest in US energy, he said, reports Breaking News.
“This all has to be worked out yet, as you can appreciate, I’m only hearing this for the first time last night, and we have nothing on paper,” reports Breaking News.
Taoiseach Micheál Martin and Tánaiste Simon Harris welcomed Sunday’s deal, acknowledging that although Ireland “regrets” the 15 per cent baseline tariff, it values the predictability the agreement provides for businesses.
Mr Harris stated that more clarity is needed on how the tariffs will impact specific sectors, including the pharmaceutical industry, reports Breaking News.
Ireland remains exposed to a potential decline in US trade, given its export of goods such as alcohol, dairy, and beef.
The Government has also raised concerns about the impact on the pharmaceutical sector, which employs around 45,000 people in Ireland, as Mr Trump had previously indicated the industry would be a target, reports Breaking News.
Furthermore, 65 per cent of all aircraft worldwide are leased through Ireland.
Last week, Finance Minister Paschal Donohoe said the Government’s €9.4 billion October budget was calculated under a zero-tariff scenario for the upcoming year.
He and Minister for Public Expenditure Jack Chambers noted that these figures may need revision in the event of an economic shock affecting Ireland, reports Breaking News.
Mr Burke rejected the idea that basing economic plans on a zero-for-zero trade deal with the US was unrealistic.
“No it wasn’t because we didn’t know what we were to be faced with,” he said on Monday, reports Breaking News.
“We do need to find out what happens in other areas, because this is very complex. It depends what happens with China, that’s a very significant market that a deal hasn’t happened yet. It really impacts what happens with our exporters here in Ireland as well, because so much product is in danger of being redirected into EU market. We also don’t know what separate carve outs are going to emerge for the different sectors that are so vulnerable from an Irish perspective. Until we get flesh on the bones and all those areas over the coming weeks, we’ll be in a better position then to really put forward what budgetary parameters (we) will end up with,” reports Breaking News.
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