The ieBusiness Podcast: UCC Finance lecturer John O'Brien calls out EU's 'weak' approach to US trade deal

UCC lecturer in finance and accounting speaks to business journalist Emer Walsh in the latest episode of the ieBusiness Podcast, in association with PwC

The deal was cautiously welcomed on the Irish side, largely because it protected pharmaceuticals from significant levies; however, other EU countries were less enthusiastic about the final agreement.

The European Union’s approach to trade negotiations with the US indicates a lack of strength and a major capitulation to the Trump administration, John O’Brien, lecturer in finance and accounting in University College Cork (UCC) has warned.

Speaking to business journalist Emer Walsh in the latest episode of the ieBusiness Podcast, in association with PwC, Mr O’Brien said the agreement in response to tariff threats from US President Donald Trump could have serious long-term ramifications on the EU economy in the long-term.

“The EU has conceded to rather high tariffs from the US,” Mr O’Brien said.

“It is completely new and outside all previous agreements. Overall, it is not a good deal. It does not show strength, and it does not show confidence in its own position or economy.” A full-blown trade war between the EU and the US was averted in July this year after the two sides struck a deal, ending months of negotiations.

The agreement saw a 15% baseline applied to all EU exports to the US, with the union agreeing to buy up $750bn worth of US energy and to invest $600bn into the US economy in the years ahead.

The deal was cautiously welcomed on the Irish side, largely because it protected pharmaceuticals from significant levies; however, other EU countries were less enthusiastic about the final agreement.

In a wide-ranging podcast interview, Mr O’Brien said that while many praised the deal for adding clarity to a highly uncertain trading environment, much was left to iron out, with many details of the agreement remaining worryingly vague.

“We are a long way from security yet. We’ve already seen Trump talking about digital services and the Digital Services Act. While it looks like there is peace at the moment, that could explode because I don’t think the EU can accept the US telling them what they feel is safe for US companies to do,” the UCC lecturer added.

Mr O’Brien also said Ireland was too optimistic about the agreement, with the impact of asymmetric tariffs likely to be felt across the economy.

“If you look at our corporate tax receipts, the largest companies are all from the US. This deal means there is going to be very little investment in those companies, and the Government needs to be prepared for that.

“For a long time, Ireland has become reliant on foreign direct investment. We’ve even become slightly arrogant about it, almost thinking that there is something special about Ireland. Yes, we are a well-developed country with good laws, but we are not that special to attract the amount of FDI that we do, and we could easily lose that.

“The government needs to be planning and diversifying in preparation for that. That is not what they seem to be doing.” In this week’s episode, Mr O’Brien speaks to Emer Walsh about Ireland’s standing with the EU in the aftermath of the Apple tax case, concerns regarding European Commission President Ursula von der Leyen and if she is the best person for the job, and the unintended consequences that a soft-handed approach to negotiations will have on the EU.