Taoiseach Micheál Martin has welcomed the European Union’s announcement that it will pause its first countermeasures against US tariffs after President Donald Trump temporarily lowered the hefty duties he had imposed on dozens of countries.
However, he said Ireland is “far from out of the woods yet” when it comes to tariffs.
The bloc was due to launch counter-tariffs on about €21 billion of US imports from next Tuesday in response to Mr Trump’s 25% tariffs on steel and aluminium. It is still assessing how to respond to US car tariffs and the broader 10% levies still in place.
“We want to give negotiations a chance,” European Commission President Ursula von der Leyen said on social media.
“While finalising the adoption of the EU countermeasures that saw strong support from our Member States, we will put them on hold for 90 days.”
Mr Trump’s sudden decision on Wednesday to pause most of his hefty new duties brought relief to battered global markets and anxious global leaders, even as he ratcheted up a trade war with China.
His turnabout, which came less than 24 hours after steep new tariffs kicked in, followed the most intense episode of financial market volatility since the early days of the Covid-19 pandemic.
Mr Martin welcomed the move, but said Ireland is “far from out of the woods yet” when it comes to tariffs, as the US measures imposed on China could dampen investment.
He said he anticipates Europe will respond positively to Mr Trump’s announcement and attempt to negotiate a package that will lessen any potential blow to trade.
Speaking to RTÉ’s Today with Claire Byrne, the Taoiseach said the objective is to engineer a package that would give Europe a safer, more sustained landing zone in terms of trade and economic relationsip.
However, he warned that we are “still a long way from that”.
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US stock indexes shot higher on the news, and the relief continued into Asian and European trading.
Before Mr Trump’s U-turn, the upheaval had erased trillions of dollars from stock markets and led to an unsettling surge in US government bond yields that appeared to catch the US president’s attention.
Meanwhile, China rejected what it called threats and blackmail from Washington.
Mr Trump kept the pressure on China, the world’s No 2 economy and second-biggest provider of US imports with an increase of tariffs on Chinese imports to 125% from the 104% level that kicked in on Wednesday.
He also signed an executive order aimed at reducing China’s grip on the global shipping industry and at reviving US shipbuilding.
Trade war with China
China will “follow through to the end” if the US insists on its own way, Commerce Ministry spokesperson He Yongqian told a regular press briefing. China’s door was open to dialogue, but this must be based on mutual respect, the ministry said.
Beijing may again respond in kind after imposing 84% tariffs on US imports to match Mr Trump’s earlier tariff salvo.
Mr Trump, who claims the tariffs aim to fix US trade imbalances, said a resolution with China on trade is also possible. But officials have said they will prioritise talks with other countries as Vietnam, Japan, South Korea and others line up to try and strike a bargain.
China’s yuan hit its lowest against the dollar today since the global financial crisis.
EU pause
In Europe, euro zone government bond yields jumped, spreads tightened, and markets scaled back their bets on European Central Bank rate cuts after Mr Trump’s latest announcement.
Mr Trump’s move was an important step towards stabilising the global economy, Ms von der Leyen said, before announcing a pause in the EU’s own counter-tariffs.
But she warned they could be brought back in.
“If negotiations are not satisfactory, our countermeasures will kick in. Preparatory work on further countermeasures continues,” she said, before adding: “As I have said before, all options remain on the table.”
Mr Trump’s reversal on the tariffs imposed on other countries is also not absolute. A 10% blanket duty on almost all US imports will remain in effect, the White House said. The announcement also does not appear to affect duties on autos, steel and aluminium that are already in place.
The US tariff pause also does not apply to duties paid by Canada and Mexico, because their goods are still subject to 25% fentanyl-related tariffs if they do not comply with the US-Mexico-Canada trade agreement’s rules of origin.
The EU had been due to impose extra tariffs on US imports including maize, wheat, motorcycles, poultry, fruit and clothing. Those are now suspended. Elsewhere, India was among countries that said it wants to move quickly on a trade deal with the United States.
Harris briefs Šefčovič after US visit
Tánaiste Simon Harris has had further engagement with the EU Trade Commissioner after his detailed and substantive discussion with US Commerce Secretary Howard Lutnik in Washington DC in recent hours.
Mr Harris took the opportunity to debrief Maroš Šefčovič on the content of the discussions.
The two also discussed the ongoing preparations at a European level to have meaningful engagement with the United States.
Speaking this morning, the Tánaiste said it has been his “consistent position”, and that of the Irish Government and the European Union, that “substantive, calm, measured dialogue” with the US is needed.
“It has always been our preference that would have happened before tariff announcements. Clearly that was not the position of the United States,” he said.
“However, after my discussions yesterday, it is now clear to me that such engagement and negotiation is likely.
“I believe it needs to have in a timely fashion. All sides need to engage in good faith because uncertainly and turmoil is not the way forward.
“The trading relationship between the EU and the US is worth €1.6 trillion per year. It’s massively important in terms of jobs, growth and investment in Ireland, across the European Union and in America.”
Mr Harris said yesterday’s discussions with Secretary Lutnik were an “opportunity to be updated directly and to gain an insight into the US position on a range of these matters”.
“I look forward to further engagement with my European counterparts in the hours and days ahead,” he added.
Additional reporting Mícheál Lehane
