The European Union has hiked pressure on the United States to strike a deal to drop its trade tariffs, by threatening to retaliate against big US aircraft manufacturers, its automotive industry and agricultural producers.
A substantially larger package of EU counter-tariffs on a range of US industries has been proposed by the European Commission, the executive body leading the bloc’s response to the transatlantic trade dispute.
The retaliatory tariffs will be subject to some changes on foot of likely push back from national capitals, and would only kick in if negotiations with the Trump administration go nowhere.
The Government is expected to lobby the commission behind the scenes to drop provisional duties on some products. The focus will be on protecting Irish industries such as whiskey distillers and producers of medical devices, from being dragged into the middle of the trade row, one source said.
Proposed tariffs on US aircraft manufacturers would likely have a big impact on Ryanair, given the Irish airline has tens of billions of euros worth of orders in to buy Boeing aircraft over the coming years.
Irish whiskey distillers fear proposed tariffs on US bourbon and wine will draw retaliation from Mr Trump, beyond the blanket 10 per cent import taxes he has put on nearly all goods sold into the US.
June O’Connell, founder of Skellig Six18 whiskey and gin, said she was disappointed that the move would bring Irish whiskey and probably other European spirits into sharp focus for the next round of tariffs.
“The EU exports far, far more spirits – including Irish whiskey – than the amount of bourbon we import from the US,” she said during a launch of her brand in Washington DC and Maryland.
There was some relief in Government Buildings that the commission did not target US dairy products in its new tariff package, which Irish officials believe would have exposed Irish butter exports. Pharmaceuticals, which are the Republic’s biggest export to the US, have also been left untouched.
EU officials have been seeking to cut a deal with the US administration that would see the sweeping tariffs introduced by Mr Trump walked back.
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The commission set out several concessions it was willing to make in a EU-US trade deal, in a document sent to senior US officials last week.
It is understood the EU executive said it would be willing to consider some tweaks to its strict food safety rules. The proposed changes would make it easier for the US to export fish and lobster to the EU, but would not open the door to US chlorine-washed chicken, one source said.
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The paper setting out the EU’s negotiating stall was sent to US commerce secretary Howard Lutnick and trade representative Jamieson Greer, according to a source with knowledge of the document.
It reiterated that the EU was willing to buy more liquefied natural gas (LNG) from the US and again proposed that both sides drop long standing pre-Trump tariffs on industrial goods and automobiles to zero.
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EU states already agreed on an initial package of tariffs on €21 billion of US products, such as soybeans, motorbikes, oranges, clothes and steel. Those levies were delayed until mid-July, after Mr Trump announced a 90-day pause on the higher rates of his “liberation day” tariffs, which would have seen EU imports face taxes of 20 per cent.
Tariffs of 10 per cent on goods sold into the US from the EU and other trading partners remain in place, as do 25 per cent duties on steel and cars.
The commission’s second package of proposed retaliatory tariffs on Thursday could hit up to €95 billion worth of US imports.
The new list of products – which is subject to change – would impact US exports of steel, rubber, cars and car parts, kitchen knives, electoral and medical equipment, and consumer goods like cigarette rolling paper, wigs and false eyelashes.
National capitals and industry have four weeks to lobby the commission, to argue for certain products or sectors to be spared import duties.
Previously France, Italy and Ireland successfully lobbied to have US whiskey, bourbon and dairy removed from the EU’s first package of tariffs, due to fears exports of European spirits and dairy would be singled out for higher tariffs by Mr Trump in response.
Speaking on Thursday, Mr Martin said the Government would make submissions to the EU executive about the proposed tariffs.
“We will be giving feedback on those areas of most sensitivity to the Irish economy and there are quite a number actually there,” the Fianna Fáil leader said.
“We will be providing feedback to the commission, but our focus has to be now on the substance of the negotiations between the US and the EU,” he said. “No one’s aims are going to be completely met in the context of a trade war.”
Mr Martin was speaking in Brussels, where he met European Commission president Ursula von der Leyen on Thursday morning.
The EU’s revised range of retaliatory tariffs is expected to be finalised by the end of June or beginning of July. EU states will then vote to approve the package of provisional duties.
The commission has also proposed export controls to restrict the sale of steel and aluminium scrap from Europe to the US.
