EU, US Strike Tariff Deal Amid Trade Tensions
New 15% Levy on EU Goods to US, Avoiding Higher Rates
The European Union and the United States have finalized an agreement on tariffs, with the EU agreeing to a 15% levy on most goods exported to the US. This deal averts the threat of significantly higher tariffs that President **Donald Trump** had previously considered, but it places an unequal burden on European exporters.
Unequal Trade-Off in New Agreement
Under the terms of the pact, US goods imported into the EU will not face similar tariffs. The agreement also includes a commitment from the EU to purchase substantial volumes of liquefied natural gas and other energy resources from the United States. This arrangement is largely seen as favoring **Trump** and the US, with the EU making significant concessions to prevent a wider trade conflict.
“It is overwhelmingly favourable to Trump and the US. The EU made many concessions as the price of avoiding a fight that could have spun into a devastating trade war.”
The European Commission, represented by President **Ursula von der Leyen**, has defended the deal as the best possible outcome under the circumstances. However, from Ireland’s perspective, the 15% tariffs represent a setback. The Irish government had advocated for a swift resolution to mitigate months of economic uncertainty.
Pharmaceutical Sector Faces New Import Taxes
A key area of discussion during the negotiations involved pharmaceutical products. This sector is a significant contributor to Ireland’s trade with the US, thanks to the presence of major manufacturing facilities. While these goods have so far been exempt from US import taxes, the new agreement will cap any future tariffs at the 15% rate.
The pharmaceutical industry accounts for a substantial portion of Ireland’s exports to the US, with companies like Pfizer and Eli Lilly operating significant plants in the Republic.
Limited EU Gains in Tariff Negotiation
In return for the EU’s concessions, the benefits for the bloc appear limited. Tariffs previously set at 27.5% on EU-made cars will be reduced to the general 15% rate. The deal does, however, offer some exemptions for aircraft parts, providing a welcome reprieve for Ireland’s vital aviation industry. Efforts are ongoing to broaden these exemptions to include other sectors, such as whiskey and wine producers.
The imposition of tariffs by the US has led to a decrease in trade for affected nations. For instance, a 2018 study found that tariffs imposed by the US on steel and aluminum imports led to a 13% decrease in bilateral trade with affected countries in the year following their implementation (Peterson Institute for International Economics 2018).
