15% tariff 'a big challenge for Ireland and Europe'

Seamus Enright

Minister of State at the Department of Trade, Enterprise and Employment, Niamh Smyth, is warning that a 15% tariffs on EU imports into the US risks deepening economic divisions in the Border region, given traders in Northern Ireland are able to sell across the Atlantic at a lower 10% rate.

The disparity in rates was something Minister Smyth was always afraid could happen, and she raised the matter on a number of occasions with leader Tánaiste and Minister for Foreign Affairs Simon Harris during recent trade forums.

“I said we really need to consider the uniqueness of the position we find ourselves in. It has always been the case arguably, being the Border area, but now we have it in real life terms in Trump’s new tariff,” she told the Celt.

“Taking account of two jurisdictions with a common travel area but working off two different tariff rates will be challenging.”

The new US trade agreement, finalised on Sunday by European Commission President Ursula von der Leyen and US President Donald Trump at his Scottish golf resort, was reached just days before a 30% blanket tariff on all EU imports was due to take effect (August 1).

The deal caps tariffs on most EU exports - cars, semiconductors, and pharmaceuticals included - at 15%. It also has the scope to introduce “zero for zero” terms on aircraft, some agricultural goods, and certain chemicals.

In exchange, the EU has committed to purchasing over €640bn worth of US energy products and €515bn worth of US military equipment over the next three years.

Global stock markets rallied and the euro fell in value against the US dollar in the immediate aftermath. Minister Smyth acknowledges the unease the deal has caused some Irish exporters, particularly in the agrifood, dairy and spirits sectors - which ships nearly €2bn worth of goods to the US annually.

“This is something we have no control of unfortunately. The Trump administration is the Trump administration, and they have taken this very heavy-handed view to their trading partners across the world, not just Ireland.”

She hopes the deal can bring some form of “stability” back to trade movement and investment however, but accepts the issues it bring to the fore will not resolve themselves “in the short term”.

“It certainly will bring a big challenge for Ireland and Europe,” regards Minister Smyth, emphasising the need for a “pragmatic” response from both government and industry in planning for the medium and long term while EU and US officials thrash out remaining specifics.

“We have to remain pragmatic, and the work now begins on attempting to pre-empt what other implications may come about as a direct result of Sunday’s agreement.”

Sunday’s tentative agreement still needs formal approval by the EU’s 27 member states and, if ratified, could come into effect before the end of summer, and Minister Smyth stressed the importance of EU solidarity in response to this latest trade shift.

She remains highly critical of the approach taken by the Trump administration to trade talks, stating their unpredictability has damaged global trading systems.

“It [the Trump administration] has been a tenure of turmoil, uncertainty and u-turns - all of the fractured approach that makes global trade more difficult for everyone.”

She concluded by highlighting the importance of renewed strategic planning in a bid to safeguard Ireland’s future economic interests, particularly along the Border region, and to maintain stability within the framework of EU cooperation and the Good Friday Agreement, the structures of which were rocked by Brexit.

Though Irish exporters will feel the immediate pressure from the tariff hike, Minister Smyth notes that American consumers also stand to bear the consequences of the White House’s actions.

“It is going to impact consumers on the American side more than anybody. Who knows what the future holds?”