So the EU and US have agreed a deal on tariffs. What is in it?
The EU has struck a deal with US president Donald Trump that will place a 15 per cent tariff on practically all goods sold from EU countries to the US. US goods will not be charged similar tariffs when they are imported into the EU.
The deal saw off the prospect of much higher tariffs Trump had threatened to put on future EU trade. It also includes a commitment that the EU will buy large amounts of liquefied natural gas and other energy from the US.
What is a tariff?
A tariff is basically a tax paid on goods imported from one country to another. The tariff is paid by the importer, but part of the cost will be borne by companies selling to the US, and part will be passed on to US consumers, raising the price. All in that means EU businesses will probably sell fewer goods in the US market, or make less profit doing so.
Is this a good deal?
It is overwhelmingly favourable to Trump and the US. The EU made many concessions as the price of avoiding a fight that could have spun into a devastating trade war.
RM Block
The European Commission, the EU’s executive arm that led the negotiations, has argued president Ursula von der Leyen got the best deal she could.
From Ireland’s perspective, the 15 per cent tariffs on transatlantic trade represents a blow. But the Government was keen for the EU to cut a quick deal that (hopefully) ends months of uncertainty.
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We’ve heard a lot about tariffs on pharmaceutical products. What is happening there?
One of the big questions during the EU-US talks centred on the fate of pharmaceutical products.
The industry accounts for a big chunk of Ireland’s trade with the US, due to the manufacturing plants of Pfizer, Eli Lilly and other pharma giants in the Republic.
Trump has frequently talked about using tariffs to bring pharma manufacturing and jobs back to the US. The sector has avoided US import taxes to date, but they are coming. This deal will cap those future tariffs at the 15 per cent rate.
Is the EU getting anything in return for all of this?
Not much. Higher tariffs of 27.5 per cent charged on EU-made cars will be brought down to that blanket 15 per cent.
The deal does include some exemptions to US tariffs for aircraft parts, which is welcome for Ireland’s aviation sector. Negotiations are ongoing to expand those exemptions to other industries and products, such as whiskey and wine.
