The European Union is to be given an extra three weeks to negotiate an agreement with the United States to avert an escalating trade war between the two sides.
Negotiators had been rushing to hammer out a bare-bones agreement that would exempt EU countries from cripplingly high import duties, which US president Donald Trump had threatened to levy on all trade coming into the US.
Talks had intensified in recent days as the EU side sought to secure some type of deal, before a July 9th deadline imposed by Mr Trump.
Tánaiste and Minister for Foreign Affairs Simon Harris said that deadline would be pushed out to the start of next month.
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“My understanding is that we can now expect an extension of the current status quo until August 1st to give further time for the EU and the US to reach an agreement in principle on a mutually beneficial agreement that works for both sides,” Mr Harris said.
Mr Trump has sought to use tariffs, which are effectively taxes on imports, to extract concessions from countries across the globe in hastily put together trade deals.
European businesses have paid tariffs of 10 per cent when selling goods into the US since early April, with the steel and automobile sectors subject to higher levies.
Talks have been ongoing over the last three months to agree a deal that would avoid EU products being hit with even higher blanket tariffs.
The Government was “cautiously optimistic” that a deal will be agreed, Mr Harris said. “It remains the position of the EU and the Irish Government that we would like to conclude discussions on a trade agreement before August 1st,” he said.
The Trump administration last week put fresh proposals on the table that would see tariffs of 17 per cent charged on EU agricultural products and food and drink imports, a move that would hurt Ireland, France and Italy.
The fresh threats were made during meetings EU trade commissioner Maroš Šefčovič had with his US counterparts in Washington. EU officials are expected to push back on the proposal, one source with knowledge of the talks said.
European Commission president Ursula von der Leyen briefed Taoiseach Micheál Martin on the status of tariff negotiations, during a phone call on Monday.
The commission, the EU executive arm that has been leading the negotiations, is facing pressure from Germany and other states to cut a quick deal.
“We’re now at the beginning of the end-game, at least for an agreement in principle,” a commission spokesman said on Monday afternoon.
Since taking office, Mr Trump has set off a global trade war that has roiled financial markets and sent policymakers scrambling to protect their economies, through efforts such as deals with the US and other countries.
In April, Mr Trump unveiled a base tariff rate of 10 per cent on most countries and additional duties ranging up to 50 per cent, although he later delayed the effective date for all but 10 per cent until July 9th. The new August 1st date offers countries a three-week reprieve.
Mr Trump has said he will impose 25 per cent tariffs on imports of goods from Japan and South Korea. The president on Monday said the new levies on both countries would come into effect on August 1st. He has vowed to announce tariff rates for dozens of other trading partners in coming days.
Mr Trump said in letters posted on his Truth Social platform that the US goods trade deficit with both countries was a “major threat to our economy and indeed our national security”.
- Additional reporting: Reuters/FT
