The Government will back a package of European Union tariffs on US products in a vote in Brussels today after bourbon whiskey and dairy products were removed from the list.
The State, as well as other EU countries, including France and Italy, had sought the removal of bourbon and dairy products over fears that the US would retaliate with further tariffs against Irish whiskey and Italian and French wine, as President Donald Trump had threatened.
Mr Trump had warned that if the European Union taxed bourbon, he would respond by putting 200 per cent tariffs on whiskey, wine, champagne and other European spirits.
Instead, the bloc will hit back with its tariffs, targeting goods ranging from US soybeans to steel, oranges, chainsaws and washing machines with import duties of 10 to 25 per cent.
EU member states are expected to approve the package in a vote among ambassadors in Brussels on Wednesday, with Coalition sources expressing some relief that the European Union is taking a relatively restrained approach to the US tariffs on global trade.
However, while the EU is appealing for negotiations with the United States, the bloc continues to work on a further, more extensive package of retaliatory actions which it could implement in the future.
Government sources said the EU approach was to let the economic consequences of the imposition of tariffs play out in the US before taking further retaliatory action.
Trillions of dollars have been wiped from stock market valuations in recent days, hitting the pensions and savings of ordinary Americans.
European Commission officials are examining several options for further action, which include targeting the trade of services – such as the output of US tech and social media giants – as well as goods.
The Government is opposed to dragging US tech multinationals into the fray, given the high concentration of those companies with European bases in Dublin.
Commission officials continue to stress that the EU wants to cut a deal with the US to end the cycle of tit-for-tat tariffs kicked off by Mr Trump.
Minister for Agriculture Martin Heydon, who met US agriculture secretary Brooke Rollins in Washington on Tuesday, said he believed the US side was preparing to engage in negotiations. Mr Heydon stressed he had a “warm” meeting with Ms Rollins, who has Irish ancestry.
Government grapples with tariff fallout
Minister for Trade Simon Harris will meet US commerce secretary Howard Lutnick in Washington on Wednesday when the two are expected to discuss potential tariffs on pharmaceutical exports from Ireland to the US – previously promised by the Trump administration and which would affect tens of billions of euros of Irish exports.
In a statement on Tuesday night, Mr Harris said: “We are here to keep the lines of communications open with US political and business leaders ... I will make the point that the European Union is ready right now to negotiate. We have a team on standby to travel to DC to begin negotiations between the EU and the US.”
