The European Union and the United States are believed to be on the brink of a deal that would stop the transatlantic dispute over tariffs escalating into a full blown trade war.
Negotiations between the two sides are near to concluding an “agreement in principle”, which sources say could be finalised imminently, if approved by US president Donald Trump.
The “agreement in principle”, if signed off by Mr Trump, would buy time for technical negotiations to continue, to iron out the more complex details of the future EU-US trading relationship, without the threat of steeper tariffs hanging over the discussions.
The European Commission’s trade negotiators, led by Maroš Šefčovič, are understood to be close to an agreement on the broad parameters of a deal on tariffs with US officials. Mr Šefčovič spoke to commerce secretary Howard Lutnick in the last 48 hours and had a further call scheduled with trade negotiator Jamieson Greer on Wednesday evening.
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The high-level contact follows a telephone call on Sunday between Mr Trump and European Commission president Ursula von der Leyen, which she said helped “move things forward”.
The outline of a draft agreement negotiated between the EU and US would see the 10 per cent tariff Mr Trump put on nearly all EU imports remain.
However, EU officials were hopeful of securing tariff exemptions for the aviation and spirits sectors in the deal, according to briefings given to diplomats in Brussels in recent days. The exact details of the agreement could be subject to change before it is finally signed off.
US tariffs charged on imports coming from the EU were due to increase to at least 20 per cent on July 9th, but the deadline was extended to August 1st by Mr Trump earlier this week. Negotiations between US and EU officials had intensified in recent weeks, as the initial deadline loomed.
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EU negotiators have been pushing back on a last-minute proposal tabled by the Trump administration, that would have seen tariffs on EU agricultural products set at a higher 17 per cent rate.
The text of any deal will likely only run to several pages. It is unclear whether it will include a reference to pharmaceuticals, a sector Mr Trump has promised to hit with huge import duties at a later date.
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The negotiating teams have been exploring a quota scheme that would allow European car manufacturers to offset some portion of the tariffs they would be charged, based on the size of their manufacturing footprint in the US.
The commission had threatened to put counter-tariffs on imports of a range of US products, such as aircraft, medical devices, automobiles, bourbon and agricultural produce, in the event talks collapsed without agreement.
Government sources in Dublin said they were on standby for developments, but cautioned it was hard to be sure a deal would be concluded in the coming days, given the unpredictability of the Trump administration.
While much of the substance of the agreement was believed to be very close to being settled, diplomatic sources in Brussels also warned that Mr Trump could decide to reopen large aspects of the negotiations unexpectedly.
An agreement that averts the prospect of cripplingly high US tariffs on European trade from the start of next month would be hugely welcomed in Government Buildings.
However, there is concern about the possibility Mr Trump could introduce separate tariffs on pharmaceutical products at a later date. Pharmaceuticals make up the bulk of the Republic’s exports across the Atlantic, given the large concentration of US pharma firms with manufacturing sites in Ireland.
