European politicians and diplomats were on standby waiting for word of a breakthrough in the tariff negotiations with the United States, which one official said had entered the “final phase”.
Negotiators from both sides have spent several intense weeks working on the broad strokes of an “agreement in principle”, that would stop US president Donald Trump following through on threats to double import duties he has charged on European goods sold to the US.
Officials in the European Commission, who have been leading the tariff negotiations, expect a deal will be signed within the coming days, if Mr Trump gives the go ahead.
Mr Trump has hiked tariffs on all US trading partners, in a bid to raise revenue and leverage concessions in a series of trade deals he wants to sign with other countries.
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Levies of 10 per cent have been charged on practically all goods sold from the European Union into the US since early April, with steel and cars facing even higher levies.
A steeper blanket rate of at least 20 per cent, or even 50 per cent, would kick in from August 1st, if a deal is not agreed between the EU and the US.
Talks to agree a bare bones deal, known as an agreement in principle, were in “an intensive and final phase,” a Brussels-based diplomat briefed on the negotiations said.
“I think one of the difficulties [during] the negotiations has been that nobody knows what Trump wants. At the end of the day, he’s the one to approve of an agreement ... Much will depend on whether the deal is indeed on his desk and what he thinks of it,” the diplomat said.
“I don’t think that anyone should expect that a deal in principle would ensure that nothing new may come even in the short and medium term,” he said.
EU officials in Brussels have cautioned that a preliminary deal may not prevent Mr Trump from introducing further tariffs at a later date, particularly on sectors in his crosshairs, such as pharmaceuticals and computer chips.
A European Commission spokesman said there was no update on the state of play. “We’re in an hour by hour situation,” he said.
It is understood negotiators have largely settled the broad substance of a deal. The agreement would see existing US tariffs of 10 per cent stay in place. EU officials are hopeful of securing tariff exemptions for the aviation and spirits sectors in the deal.
Speaking in Cork on Thursday, Minister for Finance Paschal Donohoe said the threat to place a tariff of up to 200 per cent on pharma exports was a “really serious matter for us”.
“It’s a particularly important issue in terms of forecasting our economy for 2026 and the backdrop to the budget for 2026,” he said.
In Dublin, Taoiseach Micheál Martin said US multinationals would be most damaged by a 200 per cent tariff on pharma exports.
Mr Martin said pharmaceutical and semiconductor companies based in Ireland gained strength from access to the “lucrative European Union market”. He warned against disrupting existing supply chains, which could result in medicine shortages.
The commission, which sets the union’s trade policy, is also finalising a package of EU counter-tariffs, in the event talks collapse without an agreement.
An initial batch of tariffs targeted €21 billion worth of US trade, hitting soybeans, oranges and steel. They had been put on ice while negotiations took place during Mr Trump’s first 90-day pause, on the higher rates of his “liberation day” tariffs.
The commission has drawn up a second package of tariffs on up to €95 billion worth of US products, targeting Boeing and the aviation sector, automobiles, bourbon, medical devices and agricultural produce.
It is understood the size of that second retaliatory package has been scaled back to impact around €70 billion worth of US trade, after national capitals successfully lobbied to remove some US products and industries from the hit-list.
The terms of the draft agreement, which is still subject to change, would likely need to be approved by Mr Trump, EU officials and diplomats believe.
The “agreement in principle” would buy time for technical talks to work out the more complex details of the future EU-US trading relationship, without the threat of steeper tariffs hanging over the discussions.
