A 50% tariff on EU goods would halt trade between the bloc and US, says minister

By David Young, PA

US president Donald Trump’s threatened 50 per cent tariff on EU imports would effectively halt trade between the United States and European Union, a Government minister has warned.

Minister of State for European Affairs Thomas Byrne said it was really important for EU member states and the European Commission to remain calm and measured in response to president Trump’s warning and not react to “every single utterance of provocation”.

In April, Mr Trump announced a 20 per cent tariff on EU goods being sold into the US. He later reduced that to 10 per cent until July 8th to allow for time for talks with Brussels on a potential agreement.

However, on Friday Mr Trump claimed the talks were “going nowhere” and said he was recommending that the 50 per cent tariff rate comes into effect on June 1st.

The US president also announced he would be imposing a 25 per cent tariff on all Apple iPhones manufactured outside the US. He warned that tariffs were also coming for other foreign manufactured smartphones.

Mr Byrne said the EU was in a “position of strength” in the negotiations with the US as he urged the European Commission to “stand firm” and secure a good deal with the US on trade.

The Fianna Fáil minister said the president’s threat was “clearly very concerning”.

“I think it would be very damaging for everybody,” he told RTÉ Radio One’s This Week programme. “I think it wouldn’t just be a 50 per cent tariff, I think it would effectively stop trade if that were the case, because I don’t think people would be willing to buy goods at a 50 per cent tariff and, of course, there would be EU retaliatory measures.

“But, in the meantime, I think it’s really important to note that president Trump hasn’t actually implemented this, and there are talks going on between the European Union and the US.

“I think it’s really, really important that we stay calm, we stay measured, we don’t react to every single utterance of provocation.

“And I think that that has served us well up to now and, in fact, has served other countries well, who have also got in the crosshairs (of President Trump).

“It’s just so important for us, and it’s important for the entire European Union as well. I think we are there with a really united approach – we’re bigger in population than the US, we’re a very important trading partner to the US, their systems could not work, their supply of goods could not work without what’s coming in from the European Union, and vice versa, to some extent as well.

“So I think we have a position of strength. We have to use that in the negotiations but ultimately know that trade at low or no tariffs benefits everybody.”

Mr Byrne rejects claims from the US istration that EU proposals on a trade deal were not of the quality of measures suggested by other international trading partners.

“The European Commission, which acts on behalf of all of us, is engaged on trade issues all the time, they’re experts at trade,” he said.

“They’re dealing obviously with changes in the temperature, to say the least, in the US istration’s approach, based on what president Trump has tweeted. That presents a difficulty, I think, for anybody.

“But I think that the Commission is doing a good job. They have to stand firm for us. But they know the importance of free traded goods, and they also know that this is critical for America.

“We saw the whole issue with China in recent weeks, where crippling tariffs were put in, which basically was stopping trading in total between the two countries, and they were reduced.

“So I think that we need a bit of strategic patience.”

The minister added: “We just have to deal with what we’re faced with, and this is what we’re faced with. There is an unpredictability in the relationship. There’s no question about that.

“It’s in all our interests to make that as predictable as possible. So, we don’t want to add fuel to the fire. We want to have low or no tariffs.

“And I think, ultimately, America would want that too, because they know how dependent they are for semiconductors, for pharma, and they can’t change that overnight simply with a tariff instrument. It’s not possible to do that.”