There is “no doubt” that Ireland is in a challenging position in relation to tariffs but the recently announced agreement does bring “some clarity”, the Minister for Enterprise has said.
Peter Burke said the deal reached on Sunday, which will lock in tariffs of 15 per cent on most EU imports to the US, had avoided a “direct trade war”.
Speaking on RTÉ Radio 1’s Morning Ireland on Monday, Mr Burke said the EU was four days away from 30 per cent tariffs, which would have been “significant”, while the Government is awaiting more details to emerge.
The final terms of the deal were worked out during a meeting between European Commission president Ursula von der Leyen and US president Donald Trump at his Turnberry golf resort in Scotland on Sunday.
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The accord effectively sees the EU accepting import taxes of 15 per cent on most of its huge volume of trade with the US.
The two sides agreed that no tariffs would be charged on imports of aircraft, certain chemicals and some agri-food goods, though the finer details of what agricultural products will benefit from these exemptions are still to be worked out.
Mr Burke said there would be a number of “carveouts” for particular sectors such as aviation, agri-foods and spirits. He said the Government was concerned about the “stacking mechanism”, which refers to the cumulative effect of multiple tariffs applied to the same imported product.
“All of those areas have been called out for separate carveouts, so we have to see what that will look like and what will that amount to on paper, and that’s where the devil is going to be in the detail,” he said.
“But the critical thing is that at all costs we have to avoid escalation because it would be devastating in terms of the impact because the scale of the market is so huge.”
The Fine Gael TD said the Government had been “very clear that tariffs are bad”.
“They constrain supply, they drive prices up. They’re not good for the US economy, or indeed for the Irish economy,” he said.
“Ireland’s position is very clear – we always favour an open, rules-based fair trade at every hand’s turn. When you have the talk of tariffs and a deal like this, it is going to be challenging, and I think we have to be very honest about that.”
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The deal includes EU commitments to purchase set amounts of US oil, nuclear power and liquefied natural gas annually.
In terms of Ireland buying US oil or gas, Mr Burke said he was not aware of it at this point in time but could not “give a definitive answer”.
Mr Burke added that a deal between China and the US had yet to happen, which would affect Irish exports and they would also have to see what separate carveouts will emerge.
“Until we get flesh on the bones in all those areas over the coming weeks, we’ll be in a better position then to really put forward what the budgetary parameters will end up with.”
He also said he and the Government remained committed to cutting the hospitality VAT rate to 9 per cent and that it was in the programme for government, which had been agreed by all parties.
