New US tariffs could have 'grave' consequences, warns Irish MEP

Controversial new US tariffs on European businesses could have “grave” consequences, according to a senior Irish MEP, writes Martin Banks.

The warning from Barry Cowen, a Renew Europe group member, came on the day President Donald Trump announced a 25pc levy on vehicles not made in the US.

The move is seen as a serious blow to auto industry in the EU and also Britain. It also mark a major new escalation in his global trade war.

Speaking to this website on Wednesday (26 March) Cowen cautioned against any escalation, including on the economic front, in the currently tense relations between the US and EU.

This presented, he said, a “huge challenge” but it was important that a “strong transatlantic relationship” was maintained.

In his address, President Trump said: “This is the beginning of liberation day in America. This is very modest. What we’re going to be doing is a 25pc tariff on all cars not made in the United States. We’re going to charge countries for doing business in our country and taking our jobs, taking our wealth, taking a lot of things that they’ve been taking over the years.”

At the same time he doubled down on his pledge to impose “25% or higher” tariffs on foreign-made pharmaceuticals.

Two weeks ago, President Trump criticized Ireland's trade practices, saying the US has a "massive deficit" with Ireland due to its low corporate tax rates that have attracted US pharmaceutical companies.He threatened to impose a 200% tariff on Irish products.

Cowen, speaking in the EU parliament in Brussels, said it was important to remember that Trump often “plays to his own audience and electoral base.”

The MEP, on the issue of tariffs, said it was the EU’s “job to address this and the possible impact on jobs.”

Cowen, elected to parliament in 2024, said, “If you drill down into these tariffs they just do not make sense so we have to meet this head on.”

“Building alliances,” he suggested, was one way of responding to such threats and measures.

The Irish government has warned that the country could lose up to 80,000 jobs, almost half the workforce in Ireland’s multinational sector,if Donald Trump continues a trade war with the EU. Official government data showed Ireland last year operated a trade deficit with the US of almost €93bn when goods and services were taken into account.

Trade representatives in Ireland have warned of the significant threat posed to Irish food and drink exports if the tariff hikes proposed by Donald Trump go ahead.Ireland exported about €1.9bn worth of food and drink products across the Atlantic last year.

Within the €1.9bn figure, dairy at €830m and drinks, predominantly whiskey, at €900m account for 91% of what it exported. Ireland also export pigmeat (€23m), beef (€8.8m) and seafood (€3.8m).

Cowen, a former MP in Ireland who sites on Committee on Agriculture and Rural Development, said, “Donald Trump is, you have to remember, a transactional type of politician but it is also important that we address any fears he may have.”

This, he argues, includes the issue of defence where Trump has accused Europe and the EU of “not pulling its weight”.

“Europe (on defence) has got to up its game,” admitted Cowen, who served as agriculture minister in Ireland from June to July 2020.

He voiced confidence in the EU’s ability to defend itself against such moves, saying it had demonstrated “unity and a common commitment” in recent times marked by a health pandemic, Brexit and an economic crash.

While there were some “deficiencies”, such as over regulation in some sectors, he told EU Reporter the EU’s position continues to be at threat of being “undermined,” and added: “It may be in the interests of others to try and divide us but we must not allow this.”

Meanwhile, speaking separately on Thursday, EC president Ursula von der Leyen said she “deeply regrets the US decision to impose tariffs on European automotive exports.”

She added, “The automotive industry is a driver of innovation, competitiveness, and high quality jobs, through deeply integrated supply chains on both sides of the Atlantic.As I have said before, tariffs are taxes – bad for businesses, worse for consumers equally in the US and the European Union.We will now assess this announcement, together with other measures the US is envisaging in the next days.”

She said, “The EU will continue to seek negotiated solutions, while safeguarding its economic interests.As a major trading power and a strong community of 27 Member States, we will jointly protect our workers, businesses and consumers across our European Union.”

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