Ireland 'in the dark' over fate of pharma in Trump tariff deal

Irish Independent

7 days ago

It is still unclear if pharmaceuticals, which are critical to the Irish economy, will be included in the 15pc bracket or if they could yet be hit with a higher levy.
The fate of other sectors that are important to Ireland is also unclear, with details yet to emerge about ­alcohol and some dairy products.
The EU is insisting that pharma tariffs will be capped at 15pc, on the basis of a 'very clear political commitment' made by US president Donald Trump during talks with Ursula von der Leyen of the European Commission on Sunday.
However, the US is doing a so-called Section 232 investigation into the pharma sector, a procedure that is independent of sectoral tariffs. This could lead to Trump slapping a high tariff on pharma companies, as he attempts to strong-arm them into moving manufacturing back to America.
Tánaiste Simon Harris and Taoiseach Micheál Martin welcomed a deal between the European Union and the United States, which will see a 15pc tariff on most EU imports to the US.
EU sources were insisting yesterday the US would honour the 'informal understanding' on pharma during the talks. EU Trade Commissioner Maros Sefcovic said yesterday: 'I believe that this commitment will be honoured and respected in this case as well.'
A senior cabinet minister said last night there are still elements of the deal that Ireland is 'in the dark' about.
'Where pharma and semi-conductors end up post the section 232 investigations is still an unknown,' they said.
That's where there's a significant concentration from Irish perspective
'That's where there's a significant concentration from Irish perspective. So, we're still in the dark about elements of it.'
While there were some positives from the deal, including the zero-for-zero arrangement on aviation, there is still 'an open question' on pharma, they said.
'Pharma and semi-conductors is where a lot of this will rest and there's still an open question about where they'll end up,' they added.
'Certainly 30pc – or a trade war for months – would have been worse but there is still concern about where they'll land.'
Tánaiste Simon Harris will convene a meeting of the Government Trade Forum on Friday.
The meeting will see Mr Harris give stakeholders an update on the latest analysis and implications of this trade deal.
Mr Harris described it as a 'timely opportunity to share and gain insights on what this deal will mean for the future of Irish businesses, jobs, and the economy,' as they continue to analyse its full implications.
'Whilst the agreement between the EU and the US is welcome, we know that the imposition of any tariffs will have implications and that now is the time to intensify efforts to find and ­secure more markets for Irish businesses and Irish jobs,' he added.
Meanwhile, Enterprise Minister Peter Burke will update the Cabinet today on the details of the zero-for zero-arrangement on aviation, which he will tell colleagues Ireland fought for as part of its engagement.
Agriculture Minister Martin Heydon said yesterday Ireland will now push for a zero-for-zero deal on alcohol in the next stage of negotiations with the US.
Mr Heydon said if this can be achieved, it would mean Irish whiskey would be more competitive to rival whisky exports from Scotland.
Until an agreement between the US and UK is reached, UK exports will have a 10pc tariff applied.
'We will be trying to get as much zero-for-zero [tariffs] as possible. If you take the area of Irish whiskey, 40pc of our whiskey is exported to the US. More than you would like for any one particular market,' Mr Heydon told RTÉ's Drivetime programme.
Micheál Martin said the deal 'avoids further escalation'. Photo: PA
'We know that the whiskey sector is under very significant strain at the minute with a number of distilleries stopping producing for these few months.
'If we could get zero-for-zero on ­spirits, that would put us in a very strong position. It would actually, if the 10pc remained in the UK, would actually put Irish whiskey at an advantage over Scotland,' he added.
Taoiseach Micheál Martin said no one was welcoming the baseline tariff of 15pc 'with open arms' but the EU-US agreement avoids a 'ruinous' trade war.
Mr Martin also said the deal offered 'overall ceilings' on tariff rates and would mean they are not 'stacked' upon another. Despite suggestions from president Trump, he said his understanding was that the 15pc tariff on pharmaceutical exports also represented 'a ceiling' rate.
Mr Martin said the US tariffs are 'not Brexit' and the approach for supporting businesses had to be 'strategic and not a handout'.
Asked whether the €9.4bn Budget spending announced last week would be cut, Mr Martin said they would better understand the implications closer to the budget being unveiled in October.