TAOISEACH MICHEÁL MARTIN has welcomed a trade deal struck between US President Donald Trump and European Commission President Ursula von der Leyen this evening.

The two “reached a deal” of 15% on tariffs after meeting in Scotland in a high-stakes attempt to end a months-long transatlantic trade dispute.

“We have reached a deal. It’s a good deal for everybody,” Trump told reporters after talks with von der Leyen at his golf resort in Turnberry, Scotland.

“This is the biggest [deal] of them all.”

He told reporters in Scotland that the EU had committed to investing an extra $600 billion in the United States, as well as purchasing $750 billion worth of energy.

In a statement following the announcement, Martin said the agreement “brings clarity and predictability to the trading relationship between the EU and the US – the biggest in the world. That is good for businesses, investors and consumers. It will help protect many jobs in Ireland.

“We will now study the detail of what has been agreed, including its implications for businesses exporting from Ireland to the US, and for different sectors operating here.

“The agreement is a framework and there will be more detail to be fleshed out in the weeks and months ahead.

“It does mean that there will now be higher tariffs than there have been and this will have an impact on trade between the EU and the US, making it more expensive and more challenging.”

He said that despite this, it also creates a “new era of stability” that can hopefully contribute to a growing relationship between the EU and the US.

“Given the very real risk that existed for escalation and for the imposition of punitively high tariffs, this news will be welcomed by many,” Martin concluded.

Uncertainty lifts

The European Commission, negotiating on behalf of the EU’s 27 member states, has been working to salvage a trading relationship worth €1.6 trillion annually in goods and services.

European capitals have been closely involved in the process, and their diplomats are expected to quickly sign off on the agreement reached at the leadership level.

Speaking this afternoon on RTÉ’s This Week, European Commissioner Michael McGrath said that the EU was ultimately hoping for a “zero for zero” deal in which the US and the EU would refrain from adding tariffs and counter tariffs to a large group of products.

Although this was the EU’s “ideal scenario”, McGrath accepted that this was “not entirely shared”.

“The EU’s response will depend on whether or not an agreement is reached, and I think it’s not helpful to get into the different scenarios that could emerge if there is no agreement,” McGrath said, “and if the US go ahead with the 30% [threatened tariff rate] and so on, then we are ready with our countermeasures.”

Tariff threats

Tariffs pose a serious challenge for export-oriented economies (like us in Ireland), which rely heavily on open access to international markets.

In recent decades, the dismantling of global trade barriers has helped lift millions out of poverty, particularly in developing nations.

However, the most damaging effect of the ongoing trade war may be the uncertainty it has created, freezing investment decisions both in Ireland and across Europe.

According to diplomats, the proposal includes a baseline 15% tariff on EU exports to the US, matching the rate agreed with Japan.

Exceptions would be made for key sectors such as aviation, timber and spirits, excluding wine.

The EU would also commit to increasing imports of US liquefied natural gas and make other investment pledges.

A potential compromise on steel is also being discussed, allowing a set quota to enter tariff-free, with any excess taxed at 50%.

Since Trump’s return to office, the EU has been hit by successive waves of US tariffs, including 25 per cent on cars, 50% on steel and aluminium, and a 10 per cent across-the-board rate, which could rise to 30% without a deal.

The EU is eager to avoid further damage to its already fragile economy. If talks fail, the EU has prepared retaliatory tariffs on $109 billion worth of US goods, including aircraft and cars, to take effect from 7 August.

It is also drawing up measures targeting US services.

France and other member states have urged the Commission not to shy away from using a so-called trade “bazooka” to restrict American access to European markets and public tenders, though such a move would mark a serious escalation.

Trump, who has promised to strike “90 deals in 90 days”, has so far concluded five, including agreements with Britain, Japan and the Philippines.

A deal with the EU would boost his trade credentials ahead of the US election and distract from mounting controversy over the Jeffrey Epstein case, which continues to draw backlash from some of his own supporters.