CEO Update: Latest analysis on the EU - US Trade Deal and member webinar

Dear member,

Firstly, we appreciate that many details are still emerging regarding the EU-US trade deal. With that in mind, we are circulating a presentation that provides an overview of what we currently know, as well as what remains unclear.

You can listen back to some initial reaction I shared on Morning Ireland earlier this morning here.

From an Ibec perspective, yesterday’s trade agreement between the EU and the US brings an end to a significant amount of uncertainty for some businesses. However, a 15 percent tariff still represents a substantial burden for many industries. Sectors that rely heavily on the US market and operate within tight margins will once again be significantly impacted by this additional 5 percent tariff, on top of what they have already had to absorb over the past several months.

At this stage, while details of the agreement remain limited beyond what European Commission President von der Leyen and Trade Commissioner Maroš Šefčovič stated:

The general terms of the deal include a number of trade policy elements, as well as non-trade policy elements.

The trade policy elements include:

• A 15% across the board, all-in tariff, on EU goods exports to the United States
• Pharmaceuticals and Semiconductors which equate to 75% of Ireland-US trade are reported to be included in the 15% tariff according to President von der Leyen. However, there is still a question around the stability of that rate over both the short and long-term in the face of ongoing Section 232 investigations. The European understanding, for now, appears to be that 15% will be a cap on S232 tariffs rather than a floor.
• Zero tariffs on a number of strategic products including all aircraft and component parts, some chemicals and some generic drugs, semiconductor equipment, some agricultural products, natural resources and critical raw materials. The scope of these codes and the reciprocity (i.e zero for zero, or just zero one way) are still being negotiated but we should have greater clarity by August 1^st.

The non-trade policy elements include:

• An EU commitment to purchase $750 billion of US energy, in equal portions over three years.
• An agreement for EU private investments into the US to increase by $600 billion over Presidents Trump's terms of office.
• An, as yet, unspecified commitment for EU Member States to purchase US military equipment to the value of hundreds of billions of dollars.

We will share further analysis tomorrow on the webinar and will continue to keep you updated as developments unfold.

Regards,

Danny McCoy

CEO

Ibec