THE EU-US tariff deal, struck yesterday, will avoid a painful trade war between the transatlantic allies. The stakes were high, with a looming 1 August deadline set by Washington and a €1.65tr trading relationship on the line.

Despite that, the agreement has not satisfied everyone. Many European leaders issued lukewarm statements throughout the day today, while Taoiseach Micheál Martin welcomed the agreement as an end to uncertainty for businesses.

A full deal is yet to be fleshed out. An agreed ‘framework’ has laid out the broad principles of a deal, but negotiators will still need to hammer out the details in coming days, with a joint statement expected by the original 1 August deadline.

The final agreement will need to be approved by all European leaders. US President Donald Trump will expectedly carry out the changes through executive orders, which bypasses a vote by the American parliament.

So what was agreed?

Both sides confirmed there will be a blanket 15% tariff rate on a majority of Irish goods exported to the US, the same level secured by Japan this month.

While this means the European car sector actually sees a reduction in tariffs – from 27.% to 15% – the agreed rate is three-times higher than the tariffs before. Many European ministers pointed to this as their prime gripe with the deal.

The European Commission described the deal as a step towards stabilising EU-US trade, with EU trade commissioner Maroš Šefčovič telling journalists that it was “the best deal we could get under very difficult circumstances”.

An opportunity presented itself to the EU during the deal, however. Many European governments are seeking to distance themselves from a long-term reliance on Russian energy.

The EU has agreed to purchase €647m worth of liquefied natural gas, oil and nuclear fuels from the US over three years. It also said it would pour €517bn in additional investments in America, through the private sector.

As is the case with many of these agreements, the EU has also agreed to purchase “significant amounts of US military equipment”, according to the White House.

This is a significant policy change from the European Commission, which as been promoting cross-member state trade of arms in recent months. One EU official was quick to pour cold water on this assessment, claiming it was not “agreed or discussed”.

That may suggest that the US expects EU member states to turn towards the American arms market for procurement in the near future.

Blanket tariffs, you say. Are any goods tariff-free?

So, we’re still finding this out. The exact list of goods which will be exempt from tariffs will soon be finalised, Brussels said today.

One EU official said the member states would also consider lowering levies on US cars, which are traditionally unpopular in Europe, to 0%. Machinery products and different types of fertilisers may also see zero-tariff rates, as an alternative to Russian sources.

In exchange, the official said, Washington was expected to reduce tariffs on European aircraft, certain medical devices and some pharmaceuticals – for which the US largely depends on Irish imports.

Discussions are ongoing about European alcohol exports becoming tariff-free – including wine and Irish whiskey.

Irish Farmers Association President Francie Gorman said today that the agriculture industry were the “fall guys” for EU trade policy. He questioned why the European negotiators could not achieve a lower rate of baseline tariffs, as the UK did previously.

Workers’ Union Siptu has demanded clarity for its members and is seeking immediate action from Ireland to protect jobs in specific sectors, such as pharmaceuticals, semiconductors and the drinks’ industry, which may be impacted by tariffs.

What about pharma? Any sector-specific tariffs?

The White House is currently targeting pharmaceuticals and semiconductors – microchips which power mobile devices and digital machines. The US could potentially impose massive levies to attract American companies home.

Ireland, home to thousands of multinational pharmaceutical manufacturers, hoped that there would be particular exemptions for medicines – a key industry here. Protecting pharmaceuticals was a priority in the EU’s negotiations.

An internal review by the US trade department is still ongoing over the legality of placing a levy on medical imports. Under American trade law, essential items, such as medicine and aircraft components, cannot be unfairly taxed.

Tech firms with European bases in Dublin will not be directly impacted by tariffs on physical goods, but could be affected if the US changes tax laws to make it less attractive to set up in low-tax countries, said Andrew Kenningham from Capital Economics.

Under the deal struck yesterday, the EU says the US has agreed that tariffs on pharmaceuticals and semiconductors will be capped at 15%. The White House said medicines and semiconductors would indeed be taxed at that rate.

European steel, copper and aluminium are currently facing a 50% US tariff. The White House said those sectoral tariffs “will remain unchanged” but that it would seek to ensure that the supply chains are not impacted.