EU member states have been cautioned not to anticipate a stable trade relationship with the United States, particularly regarding European pharmaceutical exports, even if an agreement in principle is reached before next Wednesday’s deadline, when the suspension of US tariffs comes to an end.
In Brussels yesterday, EU ambassadors received a briefing from Bjoern Siebert, the chief of staff for European Commission President Ursula von der Leyen, prior to his trip to Washington alongside trade commissioner Maroš Šefčovič.
The EU delegation is scheduled for two days of discussions with US Trade Secretary Jamieson Greer and Commerce Secretary Howard Lutnick before returning to Brussels on Friday.
According to reports from yesterday’s meeting, “to those [member states] inquiring about the possibility of stability, [the European Commission] was clear: ‘that won’t happen’.”
Section 232 investigations are conducted by the US Department of Commerce, focusing on the impact of imports on “national security”.
Tánaiste Simon Harris spoke with Mr. Greer by phone on June 12. It is understood that Mr. Greer mentioned they were seeking “creative solutions” for the pharmaceutical sector, which is critical to the Irish economy.
During yesterday’s briefing, the commission informed member states that officials had been advocating for zero-for-zero tariff rates—where both parties mutually agree to eliminate tariffs—on pharmaceuticals, medical devices, and semiconductors.
However, Mr. Siebert reportedly advised EU ambassadors that any agreement “is unlikely to limit President Trump’s future actions”.
Mr. Šefčovič is currently in Turkey and will travel to Washington tomorrow for discussions with senior Trump administration officials ahead of next week’s deadline for a trade agreement necessary to prevent a 50% tariff on EU exports to the US.
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On April 2, US President Donald Trump enacted significant, sweeping tariffs on a range of global trading partners, including the EU.
Following a market downturn, Mr. Trump paused these tariffs for 90 days but maintained a 10% baseline tariff on EU goods.
Since then, EU and US officials and technical experts have been engaged in negotiations to achieve a framework trade agreement by next Wednesday to avert an increase in tariffs to 50%, which would prompt the EU to retaliate with tariffs on €95 billion worth of US goods.
Bloomberg has reported that the EU might accept a baseline 10% tariff on certain goods, provided there are reduced rates for crucial sectors such as aviation, semiconductors, and pharmaceuticals.
Mr. Šefčovič and his team will meet with Mr. Greer and Mr. Lutnick over the next two days before reporting back to member states on Friday.
Officials are also advocating for a series of exemptions and quotas that would further mitigate the impact of the 10% baseline tariff.
The EU insists that its regulation of the tech sector, primarily affecting US tech giants, is non-negotiable.
It is understood that the EU’s own initiative to simplify regulations is being offered as a concession, alongside plans to boost purchases of LNG and AI technology.
Meanwhile, Minister for Finance Paschal Donohoe has stated that the EU has been striving to assemble a comprehensive response to the concerns raised by Mr. Trump, while also safeguarding significant European interests.
On his way into Cabinet, he noted, “I do hope that an agreement can be reached, as this is a trade agreement that could yield billions of Euros daily between the United States and the European Union.”
The minister expressed a real possibility that we could face a global trading environment with higher tariffs than in recent years, which would have substantial implications for global trade.
The Taoiseach has indicated that public expenditure has increased by 8% to 9% annually in recent years and that “such high levels of expenditure are not sustainable at the current pace”.
While on a trade mission in Japan, Micheál Martin mentioned meeting with the Tánaiste and the Ministers for Finance and Public Expenditure over the weekend, calling it a “sobering meeting, to be frank, given the challenges ahead amid tariffs and trade uncertainty”.
He stated that he and the Tánaiste and Ministers Donohoe and Chambers agreed that there will not be a cost-of-living package this year, emphasizing a focus on integrating reforms and commitments from the Programme for Government into the budget, which may pose challenges in the first year.
He added that last year’s and the previous year’s cost-of-living packages were one-time measures and “they’re not accounted for in the estimates of individual ministers, whether in Social Protection, Higher Education, or Education, so there will be a difference this year”.
He indicated that the overall budget for current expenditure has yet to be determined, and decisions regarding allocations for individual ministers must follow.
Furthermore, he noted that trade with Japan is increasingly vital as Ireland enters a new phase of uncertainty in its trade relations with the United States, as evidenced by the fact that six Cabinet ministers will have visited Japan by year-end.
