Any trade deal between the European Union and the United States to avoid steep trade tariffs would be limited to an “agreement in principle”, with further details to be worked out later, the European Commission president Ursula von der Leyen has said.
US president Donald Trump has threatened to put tariffs of 50 per cent on imports sold into the US from the EU, if the two sides have not agreed a trade deal by July 9th. Near-blanket tariffs of 10 per cent have been charged on EU goods since early April, with cars and steel subject to higher duties.
Speaking in Aarhus, Denmark, Ms von der Leyen said EU negotiators were “ready for a deal” and wanted a negotiated solution to the transatlantic trade tensions.
“At the same time we are all preparing for the possibility that no satisfactory agreement is reached,” the head of the EU executive said.
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“As always in negotiations you never know when they are successfully concluded, we are aiming at the 9th of July,” she said.
It would be “impossible” for any agreement next week to have thrashed out the “very complex” detail required for a full trade EU-US deal, given the two sides had only been in talks for three months, the German politician said.
The EU was finalising a “rebalancing” package of counter tariffs it would hike on a range of US products and industries, in the event Mr Trump’s higher import duties on European businesses came into effect, she added.
Earlier today, the Minister for Finance Paschal Donohoe said he believes an agreement on tariffs was “possible, but not certain”.
Speaking to Ivan Yates on Newstalk’s Pat Kenny Show, Mr Donohoe said that the EU would be looking for the minimum level of tariff possible
“And then for sectors that are really important to us we will be making the case that they’re very important to America for special recognition of them. I think an agreement is possible, but I don’t believe it’s certain.
“At the moment, an assessment, a report, is being conducted by the United States government into the life science and medicine sector. And basically, the argument that Ireland is making, along with the European Union, is that if you value affordability in medicines that can make an increasingly big difference to your life, that global supply chains have a big role to play in that.
“And if you want to ship those medicines to other parts of the world, having some of your supply chain outside of America is in your long-term interest for doing that. And that briefly is the case that we are making.”
Mr Donohoe said it would be “very grim for both sides if the situation were to descend to “tit-for-tat territory”.
Trade between the EU and the US was worth €4 billion every day, if a deal did not happen and there were “escalatory measures” that would mean the price of goods would go up on both sides of the Atlantic, which would have an impact on inflation.
The second thing that would happen, he said, would be a real risk that this would be damaging for growth and for jobs, he said.
“We published figures a few weeks ago here in Ireland. A forecast of the impact on the GDP? So we did two things. We said if there’s no tariffs, what will our economy look like? And if tariffs are applied, and what we modelled it as on, 10 per cent on everything going into the US and 60 per cent between the US and China.
“And what that would mean for the Irish economy very broadly is that we would still grow, but we would grow at a lower pace. We would still have a record number of people at work, but probably up to 75,000 fewer jobs created across the next two to four years and then we would see our public finances still being surplused but a smaller surplus.”
