Main Points
- Donald Trump announces a 90-day ‘pause’ in tariffs for countries that have not retaliated against their initial rate, with the 10% flat rate to apply.
- China will be hit with a 125% total tariff rate, effective immediately, after its own retaliation.
- US markets rallied strongly on the news of the pause on Wednesday evening Irish time.
- Mr Trump said overnight that the US is “very shortly” going to announce a “major tariff” on pharmaceuticals. The sector is Ireland’s biggest export to the US.
- The European Union (EU) was set to hit back at the United States with its own tariffs of 25 per cent, targeting a range of goods from US soybeans, to steel, oranges, chainsaws and washing machines, urging Washington back to the negotiating table.
- Tánaiste Simon Harris met US commerce secretary Howard Lutnick in Washington DC in the wake of the pause. He said he welcomed “the degree of relative certainty and time and space that has been created for meaningful engagement”.
Best Reads
- Trump tariffs explained: How did the White House come up with different rates for different countries?
- ‘Nobody but me would do this’: Donald Trump cares nothing for the doomsayers
- Fintan O’Toole: The American counter-revolution is being led by Dow Jones, S&P and Nasdaq
- China tariff response could could help EU plot its course with US.
That’s it for the evening, thanks for joining us for a rollercoaster day on the diplomatic stage and in the financial markets.
Tomorrow, Thursday, brings more reaction from European capitals, including Dublin, to the 90-day pause and the higher sectoral tariffs. European markets will also be exposed to the news for the first time. And anything could happen in Washington DC. Check The Irish Times for more coverage.
And here’s Mr Trump on the pharma issue, which Ireland had hoped might be dragged into talks, rather than hit with a pre-emptive strike.
Keith Duggan reports more remarks from Mr Harris, which were said in the context of his meeting with commerce secretary Howard Lutnick, rather than reacting to Mr Trump directly.
“I think Secretary Lutnick was very honest in his conversation with me that the president has five sectors that he wants to take action [on] in relation to tariffs and pharma is one of them,” Mr Harris said.
“I certainly made the point that actually Europe and Ireland is not the challenge here: that we actually have an opportunity to collaborate in a way that is good for the US, good for Ireland, good for the EU. I felt there was an openness to having that discussion.
“So my question to the US administration was: would there be an openness, if there is serious negotiation with Europe, to have pharma as part of that? And I certainly think there is an openness to reflecting on that. When I got here yesterday, there didn’t seem to be the space for serious negotiation.”
Donald Trump has not forgotten about the pharmaceutical sector, addressing it at a signing of executive orders in front of the media.
“We’re gonna put tariffs of the pharmaceutical companies and they’re l wanna come back,” he said. “They are gonna come back.”
Despite the 90-day reduction to a 10 per cent tariff on most countries, he threw out very high potential figures for the sector.
“The only thing that’s gonna bring them back [is] we have a barrier, you have to pay 50 per cent or 100 per cent or 200 per cent,” he said. “If they have to pay that they’re gonna say, ‘we’re not gonna pay that, were going to build here’,” he added, referring to producers relocating to the United States.
Pharmaceuticals are Ireland’s biggest export to the US. Tánaiste Simon Harris called for their inclusion in wider tariff negotiations, but the Trump administration has thus far treated them separately.
Why did Donald Trump U-turn on his bombastic tariffs for most of the world? That’s the question Cliff Taylor answers in his analysis here.
We must look at what happened in the last 24 hours, he says - in the bond market.
Simon Harris’s statement on his meeting with Mr Lutnick in full:
I was pleased to meet with Secretary of Commerce Howard Lutnick today in Washington DC.
It was a timely, valuable and substantive meeting that took place shortly after President Trump’s latest announcement in respect of tariffs. We discussed that announcement and the likely next steps.
I welcomed the fact that the President has announced the suspension of the higher tariffs announced on April 2 for a period of 90 days. This I know will come as a relief to many businesses in Ireland.
I recognise that further engagement and clarification is required between the European Commission and the administration on the detail of this.
We also had an opportunity for a substantive engagement on pharma and I outlined the mutually beneficial role that the sector plays for Ireland and the United States.
During the meeting, I also outlined the dynamic interconnected economic relationship between Ireland, Europe and the United States. I conveyed our commitment through the EU to comprehensive negotiations that would address a broad range of issues.
The meeting with Secretary Lutnick has confirmed my view that there is an openness on the part of the US to engage in such a process.
I outlined my view that Ireland, as part of the EU, wants to play a constructive role and will continue to be a voice for calm and measured engagement in the time ahead.
Here’s the man himself on the changes.
Mr Harris said there was a “very fluid” situation in Washington DC in the wake of the temporary tariff climbdown. “But I think at the end of the day as opposed to the start of the day today, we have to welcome the degree of relative certainty and time and space that has been created for meaningful engagement. This is always what needed to happen: mature, calm discussion.”
Mr Harris said clarification was still needed on the changes to planned tariffs, highlighting that a higher rate still applies on steel, aluminium and automobiles, and said even the lowered rate was a concern.
“Ten per cent tariffs still aren’t good, tariffs are bad, so we need to be cautious in relation to this. But crucially what this has done is provide the space that the European Commission, European member states and Ireland have been calling for.”
Mr Lutnick “spoke favourably” about Ireland’s economic success, Mr Harris said.
On the subject of pharmaceutical tariffs, which were set aside to be levied separately to wider tariffs at a later date, Mr Harris said: “I do now think the 90-day pause does provide space for negotiation. And I would have made the point to Secretary Lutnick this evening that if there is to be serious and substantive negotiations with the European Union, we should have as part of that a discussion about pharma and all valuable parts of industry.”
Tánaiste Simon Harris, who was in Washington DC to meet Howard Lutnick, the US commerce secretary, has told RTÉ News he welcomes the tariff reduction, which will be a “relief to many businesses in Ireland”, though he said that a 10 per cent tariff remains “bad”.
Addressing reporters at the White House on Wednesday, treasury secretary Scott Bessent said the latest changes in Donald Trump’s tariffs policy was Trump’s “strategy all along”.
“This was his strategy all along, and that you might even say that he goaded China into a bad position, they responded. They have shown themselves to the world to be the bad actors, and we are willing to cooperate with our allies and with our trading partners who did not retaliate. It wasn’t a hard message, don’t retaliate, things will turn out well.”
It’s worth noting that no deals have actually been done between the US and countries around the world as a result of the tariff threats. Some close US allies, including Japan and Israel, whose prime minister Binyamin Netanyahu visited the White House on Tuesday, entered quickly into negotiations, and other offers may have been made behind the scenes.
But the tariffs have been ramped up and dropped back down without any concrete changes from most of the countries in the world. International trade deals tend to take more than a few days to put in place, and readjusting trade surpluses may be even more difficult.
White House press secretary Karoline Leavitt said the walk back was part of a grand negotiating strategy by Mr Trump.
“President Trump created maximum negotiating leverage for himself,” she said, adding that the news media “clearly failed to see what President Trump is doing here”.
She said: “You tried to say that the rest of the world would be moved closer to China, when in fact, we’ve seen the opposite effect, the entire world is calling the United States of America, not China, because they need our markets.” −AP
US markets, which were still open and trading after several days of slump when Mr Trump issued his Truth Social communiqué, are liking the shift.
Gold is up, US bonds appear to have settled, the dollar recovered and the “Magnificent Seven” tech stocks, which have been hammered recently, put on more than a trillion in value during trading.
Shares of the companies, which include AI chip giant Nvidia , Apple, Tesla and Microsoft, were up between 7.8 per cent and 13 per cent, powering a market rally that pushed the Nasdaq up 8 per cent.
Meanwhile, economists at the influential Goldman Sachs rescinded their forecast for a US recession after the policy shift.
For many countries, the 90-day tariff pause means a reduction of a higher rate to 10 per cent. For the UK, which was already listed at 10 per cent, it’s not clear that it’s a reprieve.
Downing Street said that the UK will “coolly and calmly” continue its negotiations after Donald Trump announced a 90-day tariff pause for most nations, PA media reported.
A No 10 spokeswoman said: “A trade war is in nobody’s interests. We don’t want any tariffs at all, so for jobs and livelihoods across the UK, we will coolly and calmly continue to negotiate in Britain’s interests.”
Our Washington Correspondent Keith Duggan writes: The tone of the conversation between the Tánaiste and US Commerce Secretary Howard Lutnick, which is understood to be taking place this afternoon in the Capitol, will likely be changed by the startling 90-day pause issued by president Trump.
The meeting had been tentatively scheduled for lunchtime but within the past hour, Mr Lutnick issued a post on X in which he stated that he both he and Scott Bessent had sat with president Trump “while he wrote one of the most extraordinary Truth posts of his presidency. The world is ready to work with president Trump to fix global trade, and China has chosen the opposite direction.”
Remarks from Mr Bessent and White House Press secretary Karoline Leavitt underlined the fact that the administration is willing to negotiate with individual countries to reach mutually agreeable tariff deals. However they did not respond to questions as to why the EU had not been hit with punitive tariffs, similar to those inflicted on China, after their retaliatory tariffs were outlined today.
Analysis: Astonishing about turn by US President but uncertainty remains
Cliff Taylor writes: We have just seen an astonishing about turn by US president Donald Trump. While the introduction of his post on Truth Social focused on a further hike on tariffs with China, later he also said that there would be a 90-day pause on much of the tariffs imposed on other countries. A 10 per cent so-called reciprocal tariff will still apply to all other countries – this was the tariff which became effective last weekend and is clearly seen as some kind of a baseline. But the additional tariffs above this 10 per cent level will not apply - for now anyway.
The EU, for example, had been hit with a 20 per cent tariff in the list Donald Trump presented in the Rose Garden last week - and it appears this will now be cut to 10 per cent. ( Reports say that higher tariff levels are only being maintained on China, though full details will emerge later). Any tariffs which remain will be an issue for Irish exporters – and uncertainty remains as to what will happen in three months’ time – but for now there will be some relief if 20 per cent tariffs becomes 10 per cent. Importantly for Ireland, it is unclear whether Trump will now move ahead with separate tariffs threatened on pharma.
The step back from Trump is a major move and goes completely against what he has been saying since last week’s announcement. The White House was saying immediately after the announcement that this was all part of the president’s plan. This looks most unlikely – his trade representative Jameson Greer, testifying to Congress over the last two days, didn’t seem to know much about it. And there will certainly be speculation that upheaval on the markets – and in particular a sell-off of US government bonds overnight spurred the move, with warnings that it was creating serious financial risk. The markets responded positively to the news though risk and uncertainty still lies ahead.
US Commerce Secretary Howard Lutnick - who is due to meet Tánaiste Simon Harris in Washington today - is also, unsurprisingly, complimentary of his boss.
US Treasury Secretary Scott Bessent is hailing Trump’s announcement on the easing of tariff measures as apparent proof of the president’s deal-making prowess saying on X: “As I’ve said in the past, no one creates leverage for himself like @POTUS”.
Here is Jack Power’s updated story on Trump’s tariffs and how the US President has authorised a 90 day pause in the additional levies he placed on a wide range of countries that were willing to negotiate. Meanwhile he ramped up tariffs on Chinese imports to 125 per cent, escalating his trade war with the Asian nation.
It came shortly after the European Commission had urged the US administration to come to the negotiating table on Wednesday. EU states has also approved an initial round of retaliatory tariffs.
Wall Street’s main indexes jumped on Wednesday after US President Donald Trump authorized a 90-day pause on many of his reciprocal and 10 per cent tariffs, effective immediately, even as he raised them on China, Reuters is reporting.
The US dollar strengthened against the yen and other currencies after Trump’s announcement while Treasury yields pared gains after an auction of 10-year Treasury notes saw strong demand.
Stocks had also added to gains following the Treasury auction.
Many investors have been worrying that Trump’s wide-ranging tariffs could be severe enough to trigger a recession.
The Dow Jones Industrial Average rose 2,041.87 points, or 5.42 per cent, to 39,687.46, the S&P 500 rose 319.36 points, or 6.41 per cent, to 5,302.13 and the Nasdaq Composite rose 1,231.86 points, or 8.07 per cent, to 16,519.45.
Tánaiste and Minister for Foreign Affairs Simon Harris learned of US President Donald’s Trump announcement on easing the tariff measures during a live interview with RTÉ’s Six One News.
Mr Harris was awaiting a meeting with US Commerce Secretary Howard Lutnick in Washington DC.
He responded to a question on Mr Trump’s announcement saying that it was: “very much in line with the sort of commentary I’ve been hearing here in the United States about wanting to find a negotiated way forward.
“It’s very much what myself and my [EU] counterparts were discussing in Luxembourg only a few days ago on Monday when we gathered.”
Mr Harris added there needs to be “a period of time for engagement and not to worsen the situation while that engagement is ongoing.”
He said: “This isn’t some sort of abstract political game. This is about people’s jobs. It’s about people’s livelihoods.
“And the absolute priority for the Irish government is protecting jobs, protecting investment and working at a European level.”
Mr Harris said: “We need to see a period of calm here and we need to see serious, mature, rational debate around trade and tariffs to get this to a good place.
“Every negotiation has to see people, everybody come to the table with a willingness to engage in good faith.
“And that’s the message I’ll be taking to secretary Lutnick in the next few moments.”
President Donald Trump has announced an easing of his reciprocal tariffs for countries that have not retaliated against the US in what will be seen as a major development on Wednesday evening.
In a post on Truth Social he wrote: “Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately.
“At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable.
“Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately. Thank you for your attention to this matter!”
In the Dáil Green Party leader Roderic O’Gorman called on the Government to establish a new forum on Ireland’s economic future.
The former minister said the forum should bring together “politicians, social partners, experts, our big exporters and leading Irish entrepreneurs.
“We need an informed public debate of what our economic model needs to look like in the decades to come. What are the opportunities to better integrate economically with our closest neighbours? How do we foster European innovation? How do we speed up achieving energy independence through renewables and how do we protect our social model throughout?”
He acknowledged the Government “is doing what it can to “mitigate the impact of the tariffs. But we have to recognise this is a moment of seismic economic change. Hoping we can ride this out and regain our current model in the next few years certainly isn’t feasible.”
Marie O’Halloran
In Leinster House People Before Profit TD Paul Murphy said “this is the moment to get out of our dependence on US multinational corporations”. He said there was a “lot of rhetoric” in the debate about protecting workers, but “what they’re really talking about is protecting the big US multinationals that have operations here, acting on the basis that big pharma, big tech have the same interests as workers.
“That’s simply not true” he said, and he highlighted the Apple tax case telling the Dáil that the tech giant worked alongside the Government “not to pay us €14 billion in corporation tax they owed”.
He said Pfizer “has been cutting jobs here long before the tariffs were threatened. Look at Twitter, now X, which fired 140 workers here by email just like Elon Musk is now doing for Trump.”
The Dublin South-West TD warned that there should be no acceptance of attempts to “drive down health safety, labour and environmental standards”.
Marie O’Halloran
Should you be ‘all tariffed out’ and would like some light relief today’s Inside Politics podcast takes a look at a completely different topic - the upcoming presidential election in Ireland. Our president may not have the power to launch trade wars but the campaign for the highest office in the land - if previous elections are anything to go by - is likely to be a lively one. The panel have a look at some early clues as to which candidates will be on ballot papers later this year.
Taoiseach Micheál Martin has posted some clips of his Dáil remarks online. He says “retreating behind defensive barriers may appear attractive on the face of it, but it is not a ‘win-lose’ proposition. Ultimately, everyone loses, and the poorest lose most of all.”
Meanwhile, the debate on tariffs continues in the Dáil where Sinn Féin agriculture spokesman Martin Kenny highlighted the levels of agri-trade with the United States. “Ireland exports almost one quarter of the butter that we make in this country to America; 6 per cent of cheese produced in Ireland go to the US and over €1 billion worth of whiskey and other products in that industry goes to the US,” he said.
Marie O’Halloran reports that the Sligo-Leitrim TD said the tariffs would have an impact, “particularly on our dairy industry and indeed on our whiskey industry in Ireland. One of those industries is the Shed Distillery of Drumshambo, Co Leitrim and the producers of the famous Gun Powder Gin and whiskey products. “And I know they are very, very worried about the amount of product they have that, at the moment is on its way to the US and are not sure what’s going to happen.”
Sinn Féin Mayo TD Rose Conway-Walsh highlighted the all-island economy and said that during the Brexit negotiations “we, with our allies in the EU and US ensured there was no hard border on the island of Ireland”.
Ms Conway-Walsh said “the same diligence must be applied in this scenario in order to protect the prosperity of everyone on the island”.
Here’s Jack Power’s full report on how the European Union has approved a package of counter-tariffs on US goods. He outlines how the EU’s tariffs will hit €21 billion worth of US goods such as soybeans, almonds, oranges, steel, machinery, clothing products and luxury items such as motor-powered boats.
In the Dáil Social Democrats TD Sinéad Gibney expressed concern about the “quite mixed messaging” from senior Government spokespeople about potential supports for businesses and consumers.
As Marie O’Halloran reports she said cost-of-living supports for consumers and particularly, supports for businesses, do not “need to be introduced immediately or committed to immediately” but she insisted that “must remain an option” and must “remain on the table”.
The Dublin Rathdown TD urged the Government to “continue with the type of preparedness and analysis that we saw with Brexit”. The Civil Service “really excelled in terms of how they analysed the situation” and their suggestions as to potential outcomes.
She added that the “very fragile peace and stability” in the North “needs to be looked at anew” with the “differential tariff rates that apply and the potential for differential in terms of the EU retaliation”.
Back in the Dáil Fianna Fáil TD Séamus McGrath stressed “it is critical that we have strong political consensus in this country to face this threat. Together, we are stronger.”
He told the debate on the tariffs: “this is an existential threat, and we have to stand together for a political point of view so that we have one voice on this and we face that threat in the strongest possible way.”
His party colleague Malcolm Byrne followed up on the need for consensus and the Opposition’s actions in the speaking rights row where they have refused to offer “pairs” in the Dáil votes while Ministers are absent on business. This is involves an opposition TD acting as a “pair” by not voting when a Minister is absent.
The Wicklow-Wexford TD said “it is critical within these Houses that every opportunity is given to Ministers to ensure that they are represented at EU decision making tables”.
He said “at no stage should those seats and be left empty. So it is critical that when a pair is required for a Minister to attend a new council meeting, that that would be provided.”
Marie O’Halloran
Senior White House adviser Stephen Miller has hailed the “great reshoring of American jobs and wealth” as he explained the thinking behind President Donald Trump’s tariffs.
The White House has posted a video of Mr Miller’s comments this afternoon on social media platform X.
Mr Miller, Trump’s deputy chief of staff said: “This is the great onshoring, the great reshoring of American jobs and wealth.”
“So if you look at America today we’re totally dependent on foreign countries for the supplies to make this country run.
“All of the essential goods, materials, manufactured products that make it possible for us to live our lives.
“Our cars, our electronics, all the materials that go into our homes, our buildings, our medical supplies, our entire supply chains are completely embedded in foreign countries.
“So if there’s a national emergency of any kind and a country should stop an import or a foreign power embargoes a sea lane we are then left defenceless, helpless because of the decisions, that prior leaders made that president Trump is now reversing to let all of these industries leave our country.
“And so what he’s doing today is for the first time ever he is saying that if you have stolen our jobs and therefore threatened our national security, we will apply reciprocal tariff based on the degree of your misconduct.”
The reference to medical supplies and jobs will make Irish ears prick up amid the ongoing threat of US tariffs on pharmaceuticals and how many US multinationals in the sector have manufacturing operations here.
Minister of State Jennifer Murnane O’Connor told the Dáil debate on the US tariffs that in her Carlow-Kilkenny constituency local farmers, distilleries and pharmaceutical companies “who have contributed so much to our local economy” are anxiously waiting to see the full impact of these charges on the future growth of the economy. She said that future job creation could also be under threat.
She said “free and open trade brings opportunities, creates well paid jobs and fosters innovation. I commend the calm response of the Government and I hope that there is still time to reach agreement with the US administration.”
Marie O’Halloran
In the Dáil Labour finance spokesman Duncan Smith said “just because the United States decided to abandon diplomacy and cooperation, it does not mean that the rest of us have to”.
He said participation in the single market has not only been good for members’ economic fortunes, but also “anchored us to our allies to share our values” of democracy and peace.
The attacks on democracy around the world are concerning, he said. “The fact that 25 per cent of global citizens are living under liberal democracies compared to 50 per cent in 2004 is a worrying trend.”
His party colleague Marie Sherlock said “what we clearly need is targeted wage supports for those worst affected sectors”. She said a number of firms are almost solely focused on exporting, particularly to the US “and they need our help now”.
Marie O’Halloran
Tánaiste and Minister for Foreign Affairs Simon Harris is in Washington DC today for talks with US Commerce Secretary Howard Lutnick. In a video message posted on Instragram Mr Harris said: “my message here is simple. Ireland and the European Union want to do more business and more trade with the United States of America. We want to get to a position of certainty. We want to get to a position of negotiation where the EU and the US can sit around the table and find a way forward.” He said he was looking forward to “having a chance to sit down with Secretary Lutnick later today”.
Mr Harris may well face a tough audience. Mr Lutnick has repeatedly singled out Ireland and the Irish corporate tax regime as the “favourite” of what he calls “tax scams”, arguing that Ireland taxes US pharmaceutical and technology multinationals on their intellectual property (IP) rights at a low rate, at the expense of the United States.
European Commission President Ursula von der Leyen has been speaking to lobby group for American companies AmChamEU and has told them “Europe is open for trade and investment”
Sinn Féin leader Mary Lou McDonald told the Dáil: “nobody wins in a trade war, but we know who loses the most. It’s workers and families who carry the can in the form of increased prices, threats to jobs and livelihoods and hits to their incomes.”
As Marie O’Halloran reports Ms McDonald said US blanket tariffs are an unjustified act of economic aggression, and they are going to damage the US and the global economy.
The pharmaceutical sector received an initial reprieve, “but the landing zone on pharma tariffs is still not known”.
She said “we need a plan for Ireland for all of us to de risk our economy and mitigate the impact of these tariffs. And this means having supports in place and both state and EU level.”
Ms McDonald also highlighted how different US tariff rates apply (10 per cent) to exports to the US from Northern Ireland than from the Republic which is included in the 20 per cent rate slapped on EU products.
She asked the Government to work “hand in glove and in lock step with their counterparts” in the Northern Ireland Executive.
She called for the convening of the North-South Ministerial Council “without delay” and she called for an all-party meeting to be held.
This should become a practice as a “consistent feature of how we collectively manage this situation”.
Ms McDonald said “we need an effective transparent collaborative approach sharing with all parties and all of the information and the strategies being considered”.
The party’s finance spokesman Pearse Doherty: “The stakes are high and now more than ever is the time for cool heads.” He said “Irish interests and the interests of workers and families need to be front and centre of every decision.”Mr Doherty said people have been “ground down by the cost of living crisis” and “they cannot afford higher prices.” He also said: “Tariffs can’t be used as an excuse to drop election promises” and spoke of the continuing need for affordable childcare and housing.
Marie O’Halloran reports on how Taoiseach Micheál Martin told the Dáil of the impact on businesses in Ireland
He said tariffs represented a huge challenge to Irish exporters to the United States. “We are already hearing from some who are seeing their orders from the United States slowing or even drying up entirely, putting valuable and skilled jobs at risk.”
He pointed out that sectors like pharmaceuticals involve deeply complex and interconnect the supply chains, as we saw clearly during the pandemic.
“BE COOL!”, US President Donald Trump has been posting on Truth Social.
Back in Leinster House Minister for Finance Paschal Donohoe has told the Dáil that “Through the EU, we stand ready to negotiate with the US administration with regards to tariffs because we firmly believe that dialogue, that de-escalation is the best path forward.”
He said he hoped this approach will bear fruit and a more normal trading relationship can still be restored."
However he also said “there’s no guarantee of that” and it is likely there will not be a return to the pre-existing rules of trade.
Mr Donohoe said: “European countries including Ireland must and can adapt.”
More from Jack Power here: All but one of the 27 EU states backed the bloc’s package of counter-tariffs on US products.
Hungarian prime minister Viktor Orban’s far right government was the sole vote opposing putting tariffs on US goods.
Foreign minister Péter Szijjártó said Hungary was voting against the retaliatory tariffs as “escalation is not the answer”. In a post on X, Szijjártó said the import levies on US trade “would cause further damage” to the European economy and ordinary citizens, who would face higher prices. “The only way forward is negotiations, not retaliation,” he said.
Orban has consistently been the most pro-Trump leader inside the EU, but that hasn’t stopped Hungary getting hit with the same 20 per cent EU-wide tariff rate by the US.
Mr Martin said that while the challenges faced by Ireland and the EU are not to be underestimated, we are “taking this on from a position of strength”.
He said the Government will be bringing forward legislation to ratify Ceta – the EU’s trade deal with Canada – and he encouraged the opposition to support this, saying he has never understood the opposition to it. He also mentioned how the Government is working on an action plan on competitiveness and productivity.
Mr Martin also warned that the country is “Facing into a period of high uncertainty which could put considerable pressure on public finances.”
In the Dáil Taoiseach Micheál Martin has kicked off a debate on the tariffs.
He calls the US tariff announcements “deeply concerning and regrettable” saying they have had an “immediate and negative impact on global financial market”.
Mr Martin said there is “no way to sugar-coat it” the 20 per cent blanket tariff on goods from the EU will potentially have a very significant impact on the Irish economy.
He also said “there may be more to come” and the US has yet to set out its approach to pharmaceuticals and semiconductors.
He said he hopes the United States will “reflect carefully” before taking any further steps.
As expected, EU states have approved a package of counter-tariffs that will now be put on a range of goods imported from the United States in future, Europe correspondent Jack Power reports.
The European Commission, the EU’s executive body that sets trade policy, again called for the US to sit down and negotiate a deal, to suspend the tariffs both sides have now slapped on transatlantic trade.
“The EU considers US tariffs unjustified and damaging, causing economic harm to both sides, as well as the global economy. The EU has stated its clear preference to find negotiated outcomes with the US, which would be balanced and mutually beneficial,” the commission said in a statement.
The EU’s package of tariffs will hit more than €21 billion worth of US goods, such as soybeans, almonds, oranges, steel, clothing, and plenty more.
“These countermeasures can be suspended at any time, should the US agree to a fair and balanced negotiated outcome,” the commission said.
The EU’s retaliation amounts to a fairly limited response, given Donald Trump’s wide ranging 20 per cent tariffs on nearly all EU exports to the US will hit about €380 billion worth of trade. The tariffs, which are taxes to import goods, will make it more expensive for nearly all European businesses and producers to sell their products to the US market.
What’s in store for US shares on Wednesday after Tuesday’s volatile trading session? We’ll get a proper sense of that when the main exchanges in New York open for business at 2.30pm Dublin time, Ian Curran reports.
At the moment, it’s not looking good. After briefly turning positive this morning, Wall Street futures – which generally indicate how markets will move at the start of the session – trended sharply lower after China announced bigger tariffs on US goods imports.
It means the Nasdaq Composite, S&P 500 and Dow Jones Industrial Average – the most widely watched indices of US shares – are poised for immediate declines of between 1.8 per cent and 2.1 per cent when markets open. All three were on track for gains for much of Tuesday but reversed course towards the end of a notably choppy trading session.
Of particular concern to markets will be the spike in the yield, or interest rate, on US government bonds today. Considered the gold standard for government debt across the globe, US Treasuries are a vital piece of the global financial system’s plumbing and yields usually fall at times of uncertainty as investors seek to buy them. The opposite is happening now. Any serious deterioration in their standing with investors could have serious, complex knock-on effects in other parts of the system.
Already slightly paranoid after recent sessions, investors and traders will be on the lookout for any signs of stress or fracture in the pipes throughout Wednesday’s session.
Some serious people are starting to get worried about the risks now appearing in the US financial markets, Cliff Taylor reports.
Larry Summers, a former treasury secretary who worked for the Trump and Obama administration, commented on X on the rise in US long-term interest rates. This is happening as investors sell off US bonds, or treasuries, which would normally be a safe haven in uncertain times but are now falling in price. When bonds fall in price, their yield, or interest rate goes up.
Summers wrote: “Long-term interest rates are gapping up, even as the stock market moves sharply downwards. This highly unusual pattern suggests a generalised aversion to US assets in global financial markets. We are being treated by global financial markets like a problematic emerging market.” In another post he suggested that the US could heading for a “ serious financial crisis.”
Market analysts are also now widely referring to this move out of US dollars. And there are reports of strains appearing in hedge funds, who are active traders in stocks and bonds, similar to what happened in 2000 in the early days of Covid.
Then, the US Federal Reserve, its central bank, had to engage in a large rescue mission, pumping billions of dollars into the market. We also saw the Bank of England step in during the short-lived premiership of Liz Truss in 2022 to buy UK government bonds.
As treasuries are an asset which play a key role in global financial markets, this is not a trivial matter.
China raises 84% tariffs on US goods
China hiked its tariffs on US goods to 84 per cent from 34 per cent, in the latest escalation between the two countries. The increase is effective from April 10th, according to reports. It comes on the same day US tariffs of 104 per cent on Chinese goods came into force. China said on Tuesday to “fight to the end” against the US levies.
China told the World Trade Organisation (WTO) that Trump’s decision to impose what it has called reciprocal tariffs on Beijing threatens to further destabilise global trade.
“The situation has dangerously escalated ... As one of the affected members, China expresses grave concern and firm opposition to this reckless move,” China said in a statement to the WTO on Wednesday that was sent to Reuters by the Chinese mission to the WTO.
US president Donald Trump’s “reciprocal” tariffs on dozens of countries took effect on Wednesday, including massive 104 per cent duties on Chinese goods, as the European Union prepared retaliatory measures, escalating a global trade war.
China told a WTO meeting on trade in goods that the reciprocal tariffs violated the organisation’s rules and undermined the multilateral trading system.
“Reciprocal tariff is not – and will never be – a cure for trade imbalances. Instead, they will backfire, harming the US itself.”
In the Dáil Labour’s Ged Nash said that “Trump’s trade tantrum is having a real world impact”, writes Maria O’Halloran.
He said the US president had “gambled away the world economy in service of his own ego” and it is “quite bizarre that the country that has done the most to design the current global world economic order is now set on destroying it”.
Mr Nash said this is not about economics. “This is a political project,” an ultranationalist political project” and Mr Trump would be presiding over the “ashes of a destroyed US economy” and all that entails for the world economy.
He said the Government must move in the weeks to come to put in some supports for businesses to help them ride out the storm in the short-to-medium term.
He reiterated his proposal for a temporary short-term work scheme that would keep workers tied to their employer and avoid redundancy.
Sinn Féin’s Pádraig Mac Lochlainn said the trade wars are heating up and there will not be any winners, “certainly not among workers and taxpayers”, writes Marie O’Halloran.
He said that the tariffs not directly levied on Ireland, on the EU “can still affect us through implications for supply chains” and “existing tariffs on other countries can bite here”.
Government must outline to people what it can do to protect their jobs and to offer them reassurance, he said.
“The only way to win a trade war is not to be in one,” he said. The Donegal TD said the party is very concerned that the EU will follow Trump’s approach and implement tariffs that are economically damaging. We are clear that the blame currently lies with Trump and that all options should remain on the table.”
Independent Ireland TD Ken O’Flynn accused the Government of “the same sluggish, slow, sloth-like reaction that we’ve seen time and time again from this Government, hoping the storm will pass rather than securing the roof”.
Speaking in the Dáil debate on the US tariffs he said “the reality is that our island is dangerously exposed. Our economy is built on export. Our ties in the United States are deep, our industries from pharma to tech and to cosmetics are directly in the firing line.”
He said the economy is “too fragile, and unbalanced, and this Government has tried for years and has done nothing to fix it. What have they done? We are still over reliant on foreign investment. Indigenous businesses are under pressure, over-regulated, over-red taped and overtaxed.
“Energy prices are crushing our competitiveness,” he said adding “infrastructure such as housing and transport is light years behind where it needs to be”.
The Cork North-Central TD said local businesses should be supported immediately, “not fix this in six months, not announce something for them in the budget. We must do it now.” He commended Minister for Enterprise Peter Burke for bringing in some emergency measures “but they don’t go far enough”.
‘Time to strike a deal’
Minister of State for European Affairs Thomas Byrne said that “every disagreement will end in agreement. This is our focus because there is time to strike a deal.”
He stressed that “the EU will respond in a proportionate manner which protects our businesses and our citizens, and we will take the necessary steps to safeguard our interests”.
The European Commission “has confirmed that it will seek the agreement of EU member states to impose rebalancing measures related to steel and aluminium tariffs this week and we expect that today, maybe as we’re speaking, and that decision would be taken.”
He told the Dáil that Ireland had spoken directly with the Commission about affected sectors resulting in bourbon and dairy products being excluded from tariffs, which would affect indigenous industry.
He said the commitment to dialogue and negotiation “also extends directly from the Irish Government to the US administration and in the Tánaiste’s meeting” with the US Secretary of Commerce.
Mr Byrne stressed Ireland’s links with the EU. The economy is “anchored in the European Union” and he said the country’s membership of the EU “has been a significant factor in our economic success over the last 50 years, We’ve gone from one million people employed at the time of joining the EU to six million at the moment”.
He said the tariffs “jeopardised global value chains, supply chains that have been carefully built over decades” and nobody is going to be exempt.
Noting the different tariffs between the UK and Ireland and the impact on the all-Ireland economy, he said “the Government is very conscious of this. and we are working through these issues at all times. There are no winners. US taxpayers would be losers as well, and they would feel the burden of higher costs”.
Mr Byrne said one of his “key jobs” at EU level is working to reduce red tape for business including SMEs. Ireland is fourth in the world in terms of competitiveness rights. There are difficulties “but we are very, very competitive”.
Financial market stress
Cliff Taylor: Are there signs of stress starting to appear in the financial markets? Equities are falling for sure as the growth outlook is revised down across the world and uncertainty rises.
However, as the tariffs come into effect and Donald Trump digs in, other warning signs are starting to flash.
In particular, US government bonds – or treasuries – faced a sell off overnight. This is the reverse of what usual happens when equities sell off – normally some of the money leaving equities would go into bonds as the latter are seen as a safe haven. And US treasuries are one of the ultimate safe havens – a massive $28 trillion market which is always liquid, in other words you can always buy and sell.
That is why today’s sell-off is notable. Are investors so nervous that they are moving into cash? Or are stressed investment funds having to sell all assets to raise cash to meet calls from financiers?
Or are Trump’s policies leading investors to move out of US assets completely? The risk here is of problems emerging somewhere in the system – for example in a hedge fund – requiring the US central bank, the Federal Reserve, go step in. This is one to watch.
US tariffs will have an impact on the profitability of Irish companies
Minister for Finance Paschal Donohoe has warned that US tariffs will have an impact on the profitability of Irish companies exporting to the United States.
“It will now mean that Kerrygold is more expensive versus a competitor butter product that is developed within America,” he told Newstalk’s Pat Kenny show.
“It will then affect the profitability of the company that is selling that good into America. Because there tends to be great reluctance for the consumer to pay that higher tariff. Some manufacturers will say they’re willing to make less profit for a period of time. The reason why they would want to do that is to avoid the price of their goods going up in America and lead to them selling less. There are some signs at the moment that some sectors in the global economy are aiming to do that.”
“What you want to do then is apply tariffs to goods that are coming into Europe that do the least harm to the European economy. That is why we are doing two things; firstly, we are applying tariffs to goods that are coming in for which there may well be European substitutes available.
“Secondly, by going on particular parts of the economy, as opposed to a global response and applying tariffs to everything, we’re trying to avoid the kind of escalatory dynamic that we’re seeing happening elsewhere. We want to deliver this outcome via negotiation as opposed to a permanent trade war.”
New dynamic in the geopolitical order
Dublin MEP Barry Andrews has said there is a new dynamic in the geopolitical order and there was potential for a change in the relationship between the EU and China, writes Vivienne Clark.
Speaking on RTÉ radio’s Today with Claire Byrne show, Mr Andrews pointed out that trade agreements had been suspended because of concerns about human rights abuses in China and also sanctions that were placed on individual MEPs by the Chinese Government.
“I assume that there is some loosening of those tensions that existed between the EU and China, but there certainly is potential for some changes. But I think the European Parliament, which has the right to approve or not any trade that is arrived at by the commission would be very nervous about the shape of any even sectoral agreements with China but clearly Šefčovič was in Beijing for a reason and it would appear to be that things are improving between the EU and China.”
“The EU cannot out bravado Donald Trump,” the Dáil has been told in the first of two debates today on the US tariffs, writes Marie O’Halloran
Opening the Independent group’s private member’s motion Aontú leader Peadar Tóibín said the US president “is unencumbered by political pressure. He is unencumbered by international convention. The idea that we can somehow out bravado him in relation to this, given that he has launched 104 per cent tariff on China is absolutely wrong. I actually believe that the best retaliation is no retaliation, at the moment.”
The motion calls on the Government to take stronger and more direct role in negotiating with the US administration, to “demand that the EU pursues a pragmatic policy of de-escalation; and to “ensure that the EU does not make retaliatory tariff decisions that makes a target for the US of key Irish enterprise sectors”.
Mr Tóibín said today “is a dark day in terms of world history. It is a dark day, definitely, in terms of the Irish economy.”
“The Irish economy as it’s currently structured is significantly integrated into the US economy, and Ireland is in real danger, in serious trouble if this escalates.
“Escalation is the enemy of the Irish economy in terms of the trade war and with the United States.”
ECB ‘mobilised’ to ensure financial stability
The European Central Bank (ECB) is “fully mobilised” to ensure financial stability in the euro zone during times of “market stress”, the governor of the French central bank said on Wednesday, as global markets were roiled again by fresh turbulence. In a letter to French president Emmanuel Macron on Wednesday, ECB policymaker and governor of the Bank of France Francois Villeroy said Frankfurt is “fully mobilised to ensure the economy is well financed and (ensure) financial stability”.
He said the ECB and the Bank of France are “are monitoring to make sure the financial system’s liquidity is good, including in times of market stress”. Mr Villeroy also told reporters that Mr Trump’s tariffs announcement boosts the case for cutting euro area interest rates again when the ECB’s governing council meets later this month.
Faster-than-expected fall in ECB interest rates expected
In the every cloud and silver lining department, investment analysts now expect that the hit from a global trade war on EU growth will lead to a faster-than- expected fall in ECB interest rates this year, writes Cliff Taylor.
The ECB governing council is due to meet next week and another quarter point interest rates cut now seems nailed on.
Another may well follow at the next policy meeting in early June – and as of now markets are pricing in a further two over the balance of the year.
The ECB’s deposit rate is now 2.5 per cent and so could fall well below 2 per cent in the months ahead, bringing it back towards Covid lows, providing a boost to tracker holders and also leading to a general fall in market rates.
The flip side is the risk that tariffs imposed by the EU push up prices, which would be a problem for the ECB.
For now, however, with inflation falling towards the 2 per cent target and threats everywhere to growth the only way is down for interest rates.
EU counter tariffs
Officials from the EU’s 27 states are this afternoon due to approve its package of counter-tariffs hitting back against the United States, reports Europe Correspondent Jack Power.
The measures will put import duties of up to 25 per cent on a range of US goods sold to the EU, such as soybeans, steel, oranges, clothes, and washing machines. The retaliatory tariffs are designed to impact industries based in Republican states, to put political pressure on Donald Trump.
Trade officials representing each EU state are meeting in Brussels to approve the package of counter tariffs. The meeting is set to kick off at 1.30pm. The tariff measures are almost certainly expected to be approved.
The levies will then start to kick in from the middle of next week. Although import duties on some of the US products will only start being collected from May 15th. The EU’s tariffs on soybeans and almonds will be the last to take effect, coming into force in December.
US bonds under strain
Both the US dollar and the country’s government bonds – two tentpoles of the global financial system – came under strain on Wednesday, writes Ian Curran.
Over the past four days, the yield on the benchmark US 10-year bond has experienced one of its most aggressive increases in such a short time frame in a quarter of a century, indicating that investors view the country’s debt as increasingly risky.
The US dollar fell against safe-haven currencies as investors fled to safe-haven assets like the Japanese yen, Swiss franc and gold.
Few assets were spared the recession fears engulfing markets, with oil prices tumbling by as much as 4 per cent.
Meanwhile, China’s blue chip stocks reversed earlier losses to rise almost 1 per cent, likely underpinned by continued support from Beijing. Hong Kong’s Hang Seng index also reversed earlier declines to edge higher by 0.6 per cent.
Irish companies urged to map their supply chains
The interim chief executive of Enterprise Ireland, Kevin Sherry is urging Irish companies that export to the US to contact the dedicated response team to avail of supports. Speaking on RTÉ radio’s Morning Ireland, Mr Sherry said that companies were looking for up-to-date information and wanted to know what specific actions they can take. They also wanted to understand the tariffs and how they were going to apply to them and what supports are available. “So for Enterprise Ireland, we’ve established a dedicated response team. We’ve been in contact with all of those companies, providing them with up-to-date information and advice, information on the supports that they can avail of, and the actions that very importantly that they take, so the things that are in their control that they can take to respond to the current situation.
“If you’re an engineering company and you’re exporting into the US, from today your product will be subject to a 20 per cent tariff. Actually, it’s a little bit more complicated than that because, if you’re that engineering company and you’re also sourcing steel or aluminium from the US, the steel and aluminium that you’re sourcing from the US will be subject to a tariff of 25 per cent. So it’s really important for companies, one of the pieces of advice that we’re giving them is that they really understand their own supply chain and map their supply chain and understand what implications this has for their products.”
“At the moment one of the things we’re saying to companies is they really need to engage and proactively engage and talk to their customers and distributors and that is a topic of conversation about pricing.”
European share prices sank, oil prices plunged, and US Government debt sold off as Donald Trump’s 104 per cent tariffs on Chinese imports into the US took effect on Wednesday morning, sparking a wave of selling across global markets.
The Iseq index dropped by more than 2 per cent, erasing around half of Tuesday’s 4 per cent gain.
Europe’s big stock indices also opened lower, with the pan-European Stoxx 600 opening 2.4 per cent lower while the UK’s benchmark FTSE 100 index fell by more than 2 per cent.
The US dollar fell against safe-haven currencies, but the Chinese yuan hovered just above the lowest level since late 2007 as Beijing allowed the currency to depreciate further amid the sharp escalation in the trade war with the US.
US president Donald Trump has issued a fresh warning that the US will soon announce a “big” tariff on pharmaceutical imports.
His comments at an event at the National Republican Congressional Committee on Wednesday morning come as the global US tariffs kick in, including a 104 per cent tariff on China, the world’s largest exporter.
The Irish Government is expected to vote on a package of reciprocal European Union tariffs on US goods in a vote in Brussels today.
In a speech on Wednesday, Trump said a tariff on pharmaceutical companies – which would affect tens of billions of euros of Irish exports – will incentivise drug companies to move their operations to the US.
“We are going to be announcing very shortly a big tariff on pharmaceuticals,” Mr Trump said at the fundraising gala for House Republicans, without providing details on the planned levy.
“Once we do that, they’re going to come rushing back into our country, because we’re the big market,” he said. “The advantage we have over everybody is that we’re the big market.”
Trump has long bemoaned a lack of domestic pharmaceutical production and has repeatedly promised tariffs to bring more capacity into the country.
His administration has signalled that they’ll use so-called section 232 powers to enact the levies, though they haven’t launched the prerequisite investigation.
EU hits back
The European Union (EU) is to hit back at the United States with its own tariffs, targeting a range of goods from US soybeans, to steel, oranges, chainsaws and washing machines.
The EU plans to charge import duties of up to 25 per cent on a number of products sold from the US, in the bloc’s initial response to large tariffs on global trade introduced by US president Donald Trump.
The European Commission is now planning a further package of tariffs, beyond the measures EU states are due to vote to approve on Wednesday.
Trade mission to US
Meanwhile ... Irish Times Washington correspondent Keith Duggan reports on the weeklong trade mission led by the Government to Washington.
Minister Martin Heydon met his American counterpart Brooke Rollins, the US secretary of agriculture, in Washington on Tuesday for what he described as a “really warm” engagement in which he sought to emphasise the depth of Ireland’s inward investment across the United States.
The meeting, at the US agriculture building on the National Mall, was the beginning of a weeklong trade mission led by Mr Heydon, and preceded the meeting of Tánaiste Simon Harris with the US secretary of commerce, Howard Lutnick, on Wednesday.
New deals
US agriculture secretary Brooke Rollins has said that new deals could be struck with other countries over trade tariffs by the end of this week.
Ms Rollins made the comments in an interview to Fox News host Bret Baier on the network’s “Special Report” show.
“I believe, sincerely, it will be sooner rather than later. I believe we’ll be hearing about new deals that are being struck, perhaps by the end of the week,” Rollins said, adding 70 countries had reached out to the US for talks.
Solution to the escalating trade crisis
Tánaiste Simon Harris will tell US commerce secretary Howard Lutnick in the US today Ireland and the EU are willing to find a solution to the escalating trade crisis, writes Keith Duggan.
Mr Harris has travelled to Washington, DC, for a meeting Donald Trump’s commerce secretary days after the US slapped “reciprocal” tariffs of 20 per cent on EU imports. It is the highest level meeting between the Irish and US governments since Mr Trump set out his aggressive protectionist policy a week ago in a move that has rattled global stock markets.
Mr Lutnick has repeatedly singled out Ireland and the Irish corporate tax regime as the “favourite” of what he calls “tax scams”, arguing that Ireland taxes US pharmaceutical and technology multinationals on their intellectual property (IP) rights at a low rate, at the expense of the United States.
Asian stock indexes sink
Big stock indexes sank in Asia on Wednesday after US president Donald Trump’s eye-watering 104 per cent tariffs on China took effect. A savage sell-off in US Government bonds sparked fears that foreign funds were fleeing US assets.
The US dollar fell against safe-haven currencies, but the onshore Chinese yuan hovered just above the lowest level since late 2007 as Beijing allowed the currency to depreciate further amid the sharp escalation in the trade war with the US.
Few assets were spared the recession fears engulfing markets, with oil prices diving almost 4 per cent. The pain is likely to spread to Europe too, with Stoxx 50 futures pointing to a 3.7 per cent drop upon open.
