The Daily Star Ireland
A high-stakes trade agreement between the European Union and the United States is edging closer, centered around a proposed 15% base tariff on EU goods. While both sides have inched toward consensus, past attempts have faltered late in negotiations—most recently due to pushback from the White House. Whether this deal will break that cycle remains uncertain.
Framework of the Potential Agreement
The emerging outline of the deal includes a consolidated 15% tariff, which would bundle in current trade duties, such as the existing 4.8% “most-favoured nation” tariff under World Trade Organization rules. This streamlined rate would apply broadly, though not universally.
Notably, certain punitive tariffs—such as the 50% levies on EU steel and aluminum imposed by former President Donald Trump—are expected to remain untouched under the new structure.
One major objective of the deal is to avoid a looming escalation: a scheduled 30% tariff on European imports that would take effect on August 1 unless a resolution is reached. Sources indicate that an agreement may avert this “cliff edge,” smoothing over one of the most immediate risks in transatlantic trade relations.
Tánaiste Simon Harris has expressed guarded optimism about the negotiations. “It is now long past time to strike a deal,” he said, noting that progress is being made and a final outcome could be achieved in the coming days.
Sector-Specific Implications for Irish Exporters
For Ireland, the implications of the proposed deal are especially significant. A number of export categories—including aircraft, medical devices, and spirits—are expected to benefit from a “zero-for-zero” tariff clause, effectively shielding them from new duties.
However, the fate of pharmaceutical products and semiconductors remains less clear. Currently exempt from tariffs, these two sectors are under review by the US as part of a national security investigation. Preliminary signs suggest that if the probe concludes unfavorably, a new 15% tariff could be slapped on both product types.
Such a development would be particularly impactful for Ireland, whose pharmaceutical exports to the US alone were valued at €44 billion last year. The imposition of a new duty would force exporters to reassess their pricing models, cost structures, and supply chains. In many cases, firms may be forced to pass increased costs on to customers or relocate operations to reduce exposure.
Despite previous criticism from Donald Trump—who claimed Ireland had “taken” American pharmaceutical firms—no major US drug company operating in Ireland has publicly indicated plans to relocate in response to these discussions.
Economic Impact and Uncertainty
The proposed 15% tariff, while lower than the threatened 30%, still represents a significant cost for businesses. Simon McKeever, CEO of the Irish Exporters Association, has advocated for the creation of a “tariff adjustment fund” similar to the €1 billion Brexit Reserve Fund. This support mechanism, he argues, would be essential in helping companies absorb the shock of new levies.
Even if a deal is finalized, Irish exporters are unlikely to celebrate too loudly. Compared to the tariff-free environment of recent years, any additional cost burdens would represent a step backward for a trade-dependent economy like Ireland’s.
More broadly, the rise in protectionist policies threatens to reverse decades of trade liberalization that helped lift millions out of poverty worldwide. The uncertainty caused by these ongoing trade tensions has already stalled major investment decisions, particularly in export-focused economies.
Looking Ahead
If a finalized deal materializes, it could provide much-needed clarity to exporters and multinational firms. The removal of ambiguity about future trade conditions may prompt companies to move forward with investment plans that have been frozen due to tariff fears.
Yet for now, while both Brussels and Washington appear motivated to reach a resolution, history shows that nothing is guaranteed until the final signatures are inked. With the August deadline fast approaching, all eyes remain on the final terms—and whether this deal can truly signal a return to predictability in EU-US trade.
