Work to remove long-standing tariffs on American industrial goods has been paused by the European Parliament, while Brussels waits to see exactly how US president Donald Trump plans to rework his tariff agenda.
The commitment to remove mostly low, pre-Trump tariffs on a range of United States industrial imports was an important aspect of the European Union-US agreement struck last year.
The US supreme court ruled Trump had exceeded his authority when relying on an emergency law to impose sweeping “liberation day” tariffs on countries worldwide.
The ruling was a significant blow to the US president’s ability to leverage threats of economic pain to get his way in trade and foreign policy negotiations.
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In response to the legal defeat, Trump said he would invoke a separate, untested law to temporarily introduce a global 15 per cent tariff on imports.
European politicians and officials spent the weekend trying to confirm what the developments mean for a EU-US trade deal struck last summer, which capped tariffs on European Union goods sold into the US at 15 per cent.
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The Government is nervous about losing the relative stability that the lopsided deal brought to the transatlantic trading relationship.
“It’s so important for business that we have that predictability, that we have that certainty and that we don’t regress after a significant amount of work and time and effort has gone into reaching the agreement,” said Minister for Trade Helen McEntee on Monday. “We need absolute clarity.”
The European Parliament’s trade committee has paused its work on ratifying the EU-US tariff deal until the dust settles on the latest twist.
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Bernd Lange, chairman of the parliament’s trade committee, said the EU was “sticking to the deal”, but any vote by MEPs would be pushed back. The implications of the US supreme court decision “cannot be ignored,” he said.
The senior German MEP said the key legal tool used by the US to underpin its tariffs had been struck down.
Lange said the way in which the US intended to replace it with a global tariff rate would lead to taxes on EU imports “exceeding” the 15 per cent cap agreed.
The parliament’s work to approve commitments made by Brussels in the deal would be “put on hold” until the US could provide legal certainty, he said.
The deal negotiated between Brussels and Washington meant tariffs levied on future EU trade were set at 15 per cent, with the exception of steel and aluminium, which face much higher import taxes of 50 per cent.
Tariffs on those sectors are based on separate national security grounds, so they remain unaffected by the US court ruling.
A separate national security inquiry – known as a 232 investigation – was launched to tee up possible tariffs on pharma imports. However, the White House never followed through on those threats. The EU-US deal also excluded aircraft and some chemicals from the levies.
Tariffs on pharmaceuticals would be particularly damaging for the Republic. Several US multinational pharma firms with large manufacturing bases in the State, such as Eli Lilly, Pfizer, MSD, Johnson & Johnson and others, account for a sizeable portion of all Irish exports across the Atlantic.
The European Commission, the EU’s executive arm that leads on trade policy, wants assurances that any US global tariff will not be stacked on top of the existing rate agreed in the EU-US deal.
Speaking to broadcaster CBS at the weekend, US trade representative Jamieson Greer said the Trump administration would “stand by” the various tariff deals it had negotiated with other countries.
“I would take that to mean there will be no stacking of tariffs, that there will be no changes to what was agreed last year,” said McEntee.
“We need President Trump to be very clear as to what he is going to do next,” added the Fine Gael Minister.
