Where does the EU-US tariff deal leave Ireland?
The domestic political response to the announcement of the deal that would allow the
US
impose a
15 per cent tariff
on exports from the
EU
was markedly glum on both sides of the house. The Government was unable to muster anything more than a subdued acknowledgment it would 'bring clarity and predictability'.
Coalition leaders have been saying for many months that tariffs are not good for anyone, so the confirmation that EU Commission president Ursula von der Leyen and US president
Donald Trump
had agreed a 15 per cent level was hardly something to be welcomed.
'We will now study the details of what has been agreed, including its implications for businesses exporting from Ireland to the US, and for different sectors operating here,' Taoiseach Micheál Martin said in his initial reaction.
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Minister for Enterprise Peter Burke, speaking on RTÉ's Morning Ireland, did not specifically disagree with the earlier assessment of Ibec director general Danny McCoy that it was a capitulation.
He said the EU was four days away from 30 per cent tariffs and the possibility of a prolonged trade war, which he warned would have been far more significant. That said, he did not shy away from the challenges the tariff would present for the Irish economy, not least the State's substantial exports to the US.
On Monday, politicians on both sides of the House were still looking for clarity on the finer details of the deal. On the face of it, the Irish whiskey industry will find itself facing a higher tariff than its Scottish competitors (the UK has a 10 per cent tariff) though it might possibly benefit from carveouts announced for aircraft, chemicals and agri-food.
The other key question for Ireland revolves around pharmaceuticals and if that sector (which is the main component of Irish exports to the US) will be subject to tariffs, or will face additional ones. Despite Mr Trump saying negotiations on pharmaceuticals would be separate, Ms von der Leyen indicated it was part of the agreement.
Sinn Féin's enterprise spokeswoman, Rose Conway-Walsh, said the deal was 'nothing to be celebrated'.
She also said she was very concerned about the lack of differential between North and South, and its repercussions for both economies and for supply chains.
'It is very obvious that there is a need for a package for business and for exporters,' she said. 'We have to protect jobs. We cannot have people losing their jobs.'
The Labour spokesman on enterprise, George Lawlor, said a revised summer economic statement was needed as the one published this month was predicated on tariff levels of 10 per cent.
'We face uncertainty as to what's going to happen in the pharma sector. We also face uncertainty as to what's going to happen with the drinks industry.
'There's no doubt it's going to have serious implications. I think there was a prediction of some 45,000 jobs that would have a cloud hanging over them with a 10 per cent tariff. So with a 15 per cent tariff, that can only be a bad deal for Ireland.'
Opposition figures pointed to what they said was the inherent weakness of the EU as a political bloc. Mr Lawlor said the US emerging with zero tariffs plus side deals seemed 'ludicrous' to him.
'The notion that we come away from this in a much worse position than when we went in is something that has to be seriously examined.'
Edgar Morgenroth, professor of economics at DCU, said the deal did not give certainty. He referred to a deal Mr Trump did with Canada during his first term that he subsequently unpicked.
'Nothing is certain with this guy, except if you give him something, he will come back for more. So the whole strategy of going and negotiating was just stupid,' he said.
He also criticised the lack of political cohesion within the EU. 'In Germany they worry about the German car makers. In Ireland, we had the whiskey makers.
'Every country sees itself like a country, and never sees the power of the bloc, and it means we are an easy target because you can kind of divide and conquer,' Prof Morgenroth said.
In a worse-case scenario, if US multinationals reduced their presence in Ireland (as a result of Mr Trump's policies), and if there was also a change in the treatment of intellectual property (both big drivers of corporation tax), this would undoubtedly lead to a substantial 'fiscal shock' for Ireland, he said.
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