The European Union is prepared for a possible 15 percent tariff deal with the United States or it will hit back with 30 percent tariffs.
The European Commission has been briefing member states, including Ireland, on the state of the negotiations.
On the record, EU Trade Spokesperson, Olof Gill, would only say that the “EU continues to engage with the US intensively at a technical and political level.”
But is is understood that a deal is “on the table”, according to one EU diplomat, that would see the EU subject to a lower 15 percent tariff.
That baseline tariff would average out at 4.8 percent for US-EU trade where it matters.
And the EU is still negotiating on exemptions for some key industries.
If an agreement along these lines is reached, the EU would in turn cut tariffs – in some cases down to zero percent – to sweeten the deal.
It is not the zero for zero deal that the EU wanted, but is being seen on a marked improvement on what the US is currently threatening.
Some of Trump’s tariffs are currently on pause. That pause is due to expire next week.
If no deal is reached, the EU plans to impose counter tariffs on the US worth €93 billion.
EU tariffs would be set at 30 percent to mirror the percentage threatened by Trump, according to EU sources.
Tánaiste and Trade Minister, Simon Harris TD said:
“The Government continues to strongly support [European Trade] Commissioner Šefčovič in his efforts to strike a deal in the coming days.
“However, throughout the negotiations we have been clear that while we would engage in good faith with the US, it was also necessary to prepare rebalancing measures should negotiations not be successful.”
Responding to cricitism, including from the US President, that counter tariffs would trigger a tit for tat, the Tánaiste hit back:
“This is not escalatory – it’s a continuation of our calm, measured preparation. Our objective remains a mutually beneficial deal by 1 August.
“While we were successful in removing some key Irish sensitivities following intensive consultation with the European Commission, this package of rebalancing measures if implemented would have an adverse effect on European and Irish business.
“However let me be clear, while we do not wish to see this list ever come into effect, the EU must prepare for all eventualities and must be enabled to negotiate with the United States from a position of strength.
“That is why it is now long past time for a deal.”
The Chair of the Internal Markets Committee in the European Parliament, Anna Cavazzini, welcomed the tougher talk from EU ministers.
“The EU is finally showing an appropriate response to Trump’s threats”, she said.
The EU “should not hesitate to take retaliatory measures if Trump actually follows through on his provocative 30 precent announcement.
The EU has the largest market in the world. It should finally use this strategically.”