Calls for adjustment fund as some firms face difficulty with new 15% US tariff rate

US set to increase tariffs on EU goods from 10% to 15% under new deal

Chief executive of the Irish Exporters Association Simon McKeever said: 'I don't think it's a great deal.' Picture: David Creedon / Anzenberger

The Irish Exporters Association has called for a tariff adjustment fund to be established in light of the new trade deal between the EU and the US, as small-margin companies will find it difficult to handle the new 15% tariff and may have to “withdraw from the US”.

On Sunday, EU Commission president Ursula von der Leyen agreed a deal with US president Donald Trump which would see imports to the US from the bloc hit with a 15% tariff. This is up from the 10% currently in place but lower than the 30% Mr Trump recently threatened to impose should a deal not have been reached.

A baseline tariff rate of 15% on EU goods imported into the US would apply to most goods including cars, semiconductors and pharmaceutical goods, Ms von der Leyen said.

Meanwhile, a zero-for-zero tariff rate had been agreed for certain strategic products, including aircraft and aircraft parts, certain chemicals, and certain generic drugs.

Discussions are continuing regarding any tariff exemptions for the wines and spirits sectors in the framework trade deal between the EU and the US, a senior European Commission official said on Monday.

Mr Trump has previously threatened to impose 200% tariffs on alcohol from the EU.

The deal also includes $600bn (€510bn) of EU investments in the US and significant EU purchases of US energy and military equipment.

Chief executive of the Irish Exporters Association Simon McKeever said: “I don't think it's a great deal” for the EU, adding its “negotiating position has been hampered by its lack of investment in defence and security over the last number of years”.

“I think we've been negotiating with one, perhaps both hands tied behind our back,” he said.

This is not a trade deal, as is a traditional trade deal. This is a deal with the resident of the US. It's a deal done with a very erratic individual who seems to change his mind all the time. This is a deal that could change or be torn up at any point.

Mr McKeever added the deal raises a number of other questions, particularly when it comes to competing with the UK, which has a tariff rate of 10%.

“Where does this leave Ireland as a competitor to the UK for both exports and foreign direct investment projects now. Obviously, still being in the European Union is better for us, but what about Northern Ireland?” he said.

Mr McKeever called for a tariff adjustment fund modeled on the Brexit adjustment reserve back in 2021 to help businesses who could be significantly impacted by this deal.

He said small-margin exporters may not be able to handle this 15% tariff and might “withdraw from the US market and chase sales elsewhere”.

Chief executive of the Irish Small and Medium-sized Enterprise Association (Isme) Neil McDonnell said distillers, artisan food and confectionary companies were the ones most concerned about these tariffs prior to the deal being announced.

He said this deal was going to compound problems for smaller businesses exporting to the US, given the euro has also strengthened against the dollar in recent months.

Higher-margin producers might be able to manage the tariff “but only time will tell where they are”, Mr McDonnell said.

While exporters and small businesses have concerns about the deal, the chief executive of the American Chamber of Commerce Ireland Paul Sweetman called the deal an “important milestone in EU-US relations”.

“While some details remain to be clarified, a 15% tariff level is not an optimum trade environment and will be a significant burden to businesses already managing a 10% tariff. However, the agreement does bring a new stability and allows business decisions to be made with greater certainty,” he said.