UK and India free trade agreement to cut tariffs on goods including textiles, whiskey and cars
The UK and India signed a free trade agreement on Thursday during a visit by Indian prime minister Narendra Modi to the UK, sealing a deal to cut tariffs on goods from textiles to whiskey and cars and allow more market access for businesses.
Talks on the trade pact were concluded in May after three years of stop-start negotiations, with both sides hastening efforts to clinch a deal in the shadow of tariff turmoil unleashed by US president Donald Trump.
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Irish Times
an hour ago
- Irish Times
How the EU succumbed to Trump's tariff steamroller
The path to the EU's capitulation to Donald Trump's trade blitz was set on April 10th. The sweeping 'liberation day' tariffs that the US president had inflicted on most of the world earlier that month had sent financial markets into a tailspin as investors dumped US assets over recession fears. With the sell-off intensifying, Trump blinked and on April 9th dropped the tariffs to 10 per cent. But Brussels blinked too. On April 10th it suspended its retaliatory tariffs and accepted the US offer of talks with a knife at its throat: 10 per cent tariffs on most of its trade, along with higher levies on steel, aluminium and vehicles. Rather than join Canada and China with instant retaliation and inflict pain on US consumers and businesses, the EU – hamstrung by divergent views among its member states – chose to take the pain in the hope of securing a better deal. READ MORE Under the framework deal struck by European Commission president Ursula von der Leyen and Trump at his Turnberry golf resort on Sunday, the EU has swallowed a broad-based 'baseline' US tariff of 15 per cent, including crucially for cars, but not for steel, which will be subject to a quota system. Relief among policymakers about avoiding an immediate transatlantic trade war was tinged with regret: could the EU, the world's largest trading bloc and supposedly an economic heavyweight, have extracted better terms had it not pulled its punches early on? 'He's the bully in the schoolyard and we didn't join others in standing up to him,' said one diplomat. 'Those who don't hang together get hanged separately.' Georg Riekeles, a former commission official who helped negotiate the UK's exit from the bloc, said the EU's most recent threat to apply €93 billion of retaliatory tariffs against US goods came far too late. 'With the benefit of hindsight, the EU would have been better off answering the US vigorously in April in a one-two combo with China's retaliation against the US tariff hikes, which left markets and Trump reeling,' said Riekeles, now at the European Policy Centre think-tank. Trump views the EU as a parasite, feeding off the lucrative US market while closing its own through regulation and standards. The US president has said the union was 'formed to screw the US' and 'nastier than China'. The EU's response to his return to power in January was flat-footed. Months of planning beforehand by a dedicated team, which included senior trade officials led by another Brexit talks veteran Sabine Weyand and von der Leyen's trade adviser Tomas Baert, went up in smoke. They had drawn up a three-point plan modelled on the approach taken in Trump's first term: offer to reduce the near €200 billion goods trade deficit by buying more liquefied natural gas, weapons and agricultural products. Second, offer mutual tariff reductions on each other's goods. If that failed, they would prepare retaliation and rely on a market response to a possible trade war, or increasing inflation in the US, to force Trump to back down. But Trump moved faster than expected and by March had levied 25 per cent tariffs on steel, aluminium and cars. At a meeting in Luxembourg that month, many trade ministers were on the war path. Germany, France and a few others pushed for the commission to consult on using its new 'trade bazooka', the anti-coercion instrument. Designed after Trump's first term to counter trade policy being used to pressure governments over other matters, it would allow Brussels to bar US companies from public tenders, revoke intellectual property protection and restrict imports and exports. However, it was not clear a majority of member states agreed with the threatening move, diplomats said. Weyand told EU ambassadors, who met at least weekly to discuss progress, to show 'strategic patience'. When the UK struck a trade deal with Washington in May, accepting Trump's 10 per cent baseline tariff, it encouraged those EU member states seeking a settlement, especially Berlin. Meanwhile, a severe tit-for-tat escalation between the US and China ended in partial détente, easing investor fears of global trade turmoil. Stock markets reached record highs, despite the large tariff increases and continued uncertainty unleashed by Trump. Italy's prime minister Giorgia Meloni and German chancellor Friedrich Merz for months held on to the EU's early offer to drop all industrial tariffs if the US did the same, even though Washington had long made clear it wanted unilateral concessions. Berlin was preoccupied with obtaining a complicated 'offset' scheme to provide tariff relief for European – in practice German – car companies that manufactured and exported from the US. While EU technocrats were boxing under Queensberry rules, Trump was in a New York street fight. Maroš Šefčovič, the EU's avuncular trade commissioner, was dispatched to Washington seven times to propose areas of agreement, deliver homilies on the importance of the transatlantic relationship and promote Germany's car offset scheme. In total, Šefčovič held more than 100 hours of frustrating talks with his US counterparts. A deal for a permanent 10 per cent 'reciprocal' tariff, hatched in July with US trade representative Jamieson Greer and commerce secretary Howard Lutnick, was flatly rejected by Trump, who instead threatened to raise levies on the EU to 30 per cent, rather than 20 per cent, from August. And his threats had worked before. The retaliatory package the EU paused in April had been reduced from €26 billion to €21 billion after lobbying by France, Ireland and Italy to ensure bourbon was removed from the list, after Trump threatened to hit European distillers in return. If everything member states requested had been removed, only €9 billion of goods would have been left on the list, officials told the Financial Times. Over the months of talks, Šefčovič's phone rang regularly with ministers urging caution. Minister for Trade Simon Harris was a frequent caller. He wanted to save Ireland's pharmaceutical, spirits and beef industry from any US counterpunch and let the world – not least the Americans – know with frequent social media posts. Business leaders also called loudly for restraint, preferring to accept a cut to profit margins than risk punitive tariffs that would hit sales. A second package of retaliatory tariffs on the US was also cut to €72 billion before finally being approved on July 24th to be used if talks collapsed, bringing the total to €93 billion. The months-long uncertainty over the direction of negotiations has also exposed divisions inside the commission itself. Weyand, the steely expert whose hardball approach to Brexit often outfoxed her UK counterparts, has consistently argued for a stronger stance towards Trump and the use of the EU's retaliation tools, in opposition to the more dovish von der Leyen, multiple diplomats and officials told the FT. The French government, notwithstanding its attempts to shield French business from retaliation, has also repeatedly called for a more muscular commission approach to Trump's tariffs. But the commission president and her close aides argued that the potential damage from additional Trump measures – including threats to impose specific tariffs on critical sectors such as EU pharmaceuticals – meant the risk of a spiralling trade war was too great. There was also concern that a more confrontational stance towards Washington could spill over into other areas. Europe's dependency on America's security guarantee was a further argument against trade confrontation, especially for the bloc's eastern and northern members. Fears that Trump would cut off weapons supplies to Ukraine, pull troops out of Europe or even quit Nato overshadowed the talks, diplomats said. A further priority for the commission president was to preserve the EU's right to regulate. The US tech industry has pushed hard for Trump to pressure the EU to weaken laws regulating online speech and data management. They also opposed national digital taxes. So far von der Leyen has refused to compromise on those issues. 'Some in the commission's trade directorate viewed this as a classical trade dispute and were pushing for retaliation, but von der Leyen had to consider the bigger picture which drove her caution and risk aversion,' said Mujtaba Rahman, Europe managing director at Eurasia Group, the risk consultancy. After Trump rebuffed the deal hatched by his own officials, the commission's negotiating team concluded they had no option but to accept a US tariff of 15 per cent. They pitched the number to member state ambassadors this week. Officials will try to present it as a status quo deal, since the 15 per cent theoretically includes the pre-existing average US tariff of 4.8 per cent. In fact, on a trade weighted basis, the pre-existing US tariff on imports from the EU was only 1.6 per cent. There is no hiding the fact the EU was rolled over by the Trump juggernaut, said one ambassador. 'Trump worked out exactly where our pain threshold is.' – Copyright The Financial Times Limited 2025
Irish Times
an hour ago
- Irish Times
EU-US tariffs deal dominates news front pages
The front pages of European and US newspapers are this morning dominated by the deal reached between the EU and United States on tariffs on Sunday. The two blocs have agreed a deal that will lock in tariffs of 15 per cent on most EU imports to the US, but prevent the prospect of an economically devastating trade war. The final terms of the deal were worked out during a meeting between European Commission president Ursula von der Leyen and US president Donald Trump at his Turnberry golf resort in Scotland. The headline on the front page of the New York Times states: 'US and Europe find agreement on a 15 per cent tariff'. READ MORE 'Altogether, while it was clear that major details still needed to be hammered out, the framework seemed likely to permanently reshape the trading relationship between two of the world's largest and most interconnected economies,' the front page piece says. The Washington Post's lead story explains how both leaders 'sought to paint the accord as the 'biggest deal ever made' but it was unclear if they were on the same page about how steel and other critical products would be affected'. The New York Post features a large picture of EU president von der Leyen and US president Trump shaking hands with the headline 'EU got a deal!'. The picture of the two leaders shaking hands dominates the front of the Financial Times also, with its headline 'Brussels accepts 15 per cent US tariffs to fix 'unfair' trade relations, says Trump'. Spanish newspaper El País leads with the headline 'The European Union gives in to Trump and accepts tariffs of 15 per cent'. French newspaper Le Figaro goes with: 'Europe reaches agreement with Trump at the last minute'. Belgian newspaper De Morgen states that 'an all-out trade war between the EU and the US has been averted'. The Times UK and Scotsman focus instead on Mr Trump's meeting with UK prime Keir Starmer later on Monday. 'Starmer to press Trump on Gaza', the front page of the Times states, while the Scotsman says 'Starmer heads to Turnberry talks as Trump holds court'. Back home, the deal features across the front pages of The Irish Times, the Irish Independent, the Irish Examiner and the Irish Daily Mail. The Irish Sun's front page is taken up with a picture of Ms von der Leyen and Mr Trump shaking hands with the headline 'Putt it there!' accompanied by a smaller image of Mr Trump golfing on Sunday.
The Journal
an hour ago
- The Journal
Tánaiste welcomes trade deal between EU and US but says ‘a lot of detail needed' for pharma sector
LAST UPDATE | 9 mins ago THE TÁNAISTE HAS welcomed a deal between the European Union and the United States but added that 'a lot of detail on the agreement' in relation to the pharma sector needs to be brought forward. The deal was reached yesterday during a meeting between Donald Trump and the president of the European Commission, which will see a 15% tariff on most EU imports to the US. The US president met European Commission president Ursula von der Leyen to hammer out the final details on the trading relationship between Europe and the US. Tánaiste Simon Harris welcomed the fact that the deal avoids tariffs of 30% which had been due to be imposed by the US on 1 August. It will also avoid the EU imposing its own countermeasures at this time. He added that it provides 'a measure of much needed certainty for Irish, European and American businesses'. While Harris said he 'regrets that the baseline tariff of 15% is included' in the deal, he acknowledged that the US has 'made clear that a baseline tariff was always going to be part of the outcome'. Von der Leyen described the 15% tariffs as 'across the board, all-inclusive', but Harris said 'there is still a lot of detail on the agreement which will need to be brought forward including in relation to pharma, aviation and other sectors'. 'Over the coming days, we will be examining what has been agreed and the full implications for Irish business and the economy, including any implications for the all-island economy,' said Harris. In a letter to the Trade Forum yesterday, Harris said it is his understanding that the 15% is a 'ceiling on any potential tariffs that may be imposed, including those relating to pharmaceuticals and semiconductors'. 'The EU will continue to work with the US to underline the closely integrated nature of the EU and US pharmaceutical sector,' he added. And while the baseline tariff is 15%, Harris said there are 'important exclusions, including a zero for zero arrangement on aviation'. Harris said Ireland made the case for 'zero for zero arrangements in as many sectors as possible'. 'As the framework negotiations continue the EU will keep working to add more products,' added Harris. Meanwhile, Taoiseach Micheál Martin said the agreement was very welcome and that it 'brings clarity and predictability'. 'That is good for businesses, investors and consumers. It will help protect many jobs in Ireland. Advertisement 'We will now study the detail of what has been agreed, including its implications for businesses exporting from Ireland to the US, and for different sectors operating here. 'The agreement is a framework and there will be more detail to be fleshed out in the weeks and months ahead.' Martin said the higher tariffs will have an impact on trade between the EU and the US, which will make it more expensive and more challenging. 'However, it also creates a new era of stability that can hopefully contribute to a growing and deepening relationship between the EU and the US, which is important not just for the EU and the US, but for the global economy,' he added. 'Given the very real risk that existed for escalation and for the imposition of punitively high tariffs, this news will be welcomed by many.' Elsewhere, Ibec CEO Danny McCoy said that while the deal 'brings an end to a significant amount of uncertainty', a 15% tariff 'still represents a substantial burden for many industries'. 'Sectors which rely heavily on the US market and operate within small margins, will once again be significantly impacted by an additional 5% tariff, on top of what they have already had to absorb over the past several months and well in excess of the 1% effective tariff which existing before April,' said McCoy. He noted that 'details are still emerging' and that 'these details will be critically important for Ireland'. 'Pharmaceuticals and Semiconductors which equate to 75% of Ireland-US trade are, we understand, included in the 15% deal.' Speaking yesterday, EU commissioner Michael McGrath said the meeting was a 'significant and decisive moment'. McGrath, EU Commissioner for Democracy, Justice, the Rule of Law and Consumer Protection, said it would involve substantive negotiations between both sides. 'It's a significant moment, we hope a decisive moment, and it builds on an enormous amount of work that has been done over quite a period of time,' Mr McGrath said ahead of the meeting. 'President Trump invited President von der Leyen to Scotland for a meeting. 'This follows on the back of intensive negotiations over a number of months. He added: 'It is not a case of turning up and signing on the dotted line. There will be a real discussion that will happen, and it will take on a dynamic of its own, and let's see what happens over the course of the afternoon. 'But from the EU's point of view, we are determined to do all that we can to get a deal for European businesses, because we recognise the cost of uncertainty. 'It manifests in trade and in investment decisions and ultimately in employment and of course tariffs can cost consumers at the end of the day. 'We want a good deal. We have negotiated hard, and we're at a point now where hopefully the two leaders can today bring it to a concluding phase.'
