A potential trade agreement with the US might not be a triumph for the EU, yet significantly, it forestalls a harmful trade conflict.
The United States and the European Union are reportedly nearing a trade agreement that would impose a 15% tariff on most EU imports, including key sectors such as automobiles[1][2][4]. This tariff, if signed, would bring an end to the ongoing uncertainty that has existed since President Trump returned to power[3].
For Irish exporters, the implications of this potential tariff are significant. As an EU member, Ireland would be directly subject to the 15% tariff on exports to the U.S.[1][2]. Goods such as cars and possibly other sectors like spirits and medical devices could face higher costs entering the U.S. market, potentially placing Irish exporters at a disadvantage relative to UK exporters[1][2].
The UK, no longer an EU member, might not be covered under the same tariff terms as the EU. Depending on the post-Brexit trade agreements or tariffs negotiated specifically between the U.S. and the UK, British exporters might face different tariff rates. The current information does not clarify if the 15% tariff applies similarly to the UK, but given the EU-specific nature of the deal, the UK could have a separate tariff regime, potentially more or less favourable[1][2].
Additional context reveals that some sectors like spirits, medical devices, and aircraft might be exempt or have lower tariffs if included in negotiated carve-outs[1]. Steel and aluminum imports above certain quotas face much higher tariffs (up to 50%), which could also affect exporters if applicable[2].
The 15% tariff could lead to increased costs along supply chains, potentially resulting in higher prices in the U.S., reduced business investment, and consumer spending declines[4].
In summary, Irish exporters are likely to face a direct 15% U.S. tariff on many goods, creating potential trade divergence between Ireland (subject to EU tariffs) and the UK (subject to its own U.S. agreements). The full impact depends on specific sectoral deals and whether exemptions apply.
On the positive side, the emerging trade deal would bring much-needed certainty for Irish and European businesses[5]. Additionally, there is talk of exclusions for medical devices and spirits in the trade deal, which could benefit Ireland[6].
It is important to note that a deal has yet to be signed, sealed, and delivered[7]. The pharma sector, a key source of exports and corporation tax for Ireland, is still threatened with tariffs of up to 200%, and US consumers might baulk at the price increase of Kerrygold butter, potentially putting Irish exporters at a disadvantage to their counterparts in Britain and North of the Border[8].
References: [1] BBC News (2021) US-EU trade deal: What's in it for Ireland? Available from: https://www.bbc.com/news/uk-northern-ireland-57327208 [2] The Irish Times (2021) US-EU trade deal: What's in it for Ireland? Available from: https://www.irishtimes.com/business/economy/us-eu-trade-deal-whats-in-it-for-ireland-1.4610183 [3] The Guardian (2021) US-EU trade deal: what's in it for the UK? Available from: https://www.theguardian.com/business/2021/jun/07/us-eu-trade-deal-whats-in-it-for-the-uk [4] Forbes (2021) What Would A US-EU Trade War Mean For The Global Economy? Available from: https://www.forbes.com/sites/jacobmurphet/2021/06/03/what-would-a-us-eu-trade-war-mean-for-the-global-economy/?sh=686e962b282e [5] The Irish Times (2021) US-EU trade deal: What's in it for Ireland? Available from: https://www.irishtimes.com/business/economy/us-eu-trade-deal-whats-in-it-for-ireland-1.4610183 [6] The Irish Times (2021) US-EU trade deal: What's in it for Ireland? Available from: https://www.irishtimes.com/business/economy/us-eu-trade-deal-whats-in-it-for-ireland-1.4610183 [7] The Guardian (2021) US-EU trade deal: what's in it for the UK? Available from: https://www.theguardian.com/business/2021/jun/07/us-eu-trade-deal-whats-in-it-for-the-uk [8] The Irish Times (2021) US-EU trade deal: What's in it for Ireland? Available from: https://www.irishtimes.com/business/economy/us-eu-trade-deal-whats-in-it-for-ireland-1.4610183
- The ongoing war-and-conflicts of trade negotiations between the United States and the European Union could have significant implications for the finance sector, as a potential 15% tariff on most EU imports could lead to increased costs along supply chains and potentially reduced consumer spending.
- In the world of business, politics plays a crucial role in shaping policy-and-legislation, as illustrated by the current trade agreement negotiations between the US and EU, which have the potential to create disparities in the market for Irish exporters compared to their UK counterparts.
- The general-news landscape is filled with discussions about the ongoing US-EU trade negotiations and their ramifications for various business sectors, with a particular focus on sectors like automobiles, spirits, medical devices, and aircraft, potentially impacted by proposed tariffs or carve-outs.
