A framework agreement on trade between the European Union and the United States was "tantalisingly close" before President Donald Trump's letter threatening a 30% tariff on imports from the EU, the Tánaiste has said.
"A framework agreement was tantalisingly close, even in recent days and I think that's why, when the letter came, there was surprise because genuinely from a European perspective there was an expectation that a deal was in there," Simon Harris said.
Speaking at a trade conference, Mr Harris said "there was and can I say remains absolutely space for a deal," adding that sector-specific areas the US may separately tariff such as pharmaceuticals were unlikely to be part of such a framework.
Earlier, Mr Harris said that Ireland is "now at a moment of major economic challenge".
He said the impact of 30% tariffs would be "extraordinary", adding that Ireland is working alongside its European partners to prepare for "every eventuality".
'Renewed effort' needed
"There were moments last week where I believe it was almost palpable that there was an agreement nearly in place, and really what needs to happen in the hours and days ahead is a renewed effort to arrive at an agreement that can protect jobs, can protect economic stability in Ireland, in Europe and in the United States."
The Tánaiste said he believes that Mr Trump's tariff threats are an effort to negotiate and apply pressure to other countries for a trade deal with the US.
"We also have to be honest with people, and we have to relay to the public what we're hearing from our interlocutors in Brussels ... if you arrived in a scenario where there were 30% tariffs, the impact to that is extraordinary.
"It would completely and utterly alter the trading relationship between Ireland and the United States.
"You'd go from a situation at 10% tariffs where you're seeing a slower rate of new job growth, to a situation of 30% where inevitably, you'll be seeing job losses."
Regarding the impact of 30% tariffs on the pharmaceutical industry, the Tánaiste said that tomorrow he will convene a meeting through the Irish Embassy in Washington, with a number of US pharmaceutical companies to get their perspective.
"The EU and the US have huge potential to work together in pharma, but were the US to decide to do something that is ill-conceived or ill-thought out on pharma, I think that would have very significant consequences, not just for Ireland, but also for patients across the Atlantic and also for global supply chains.
"This is objectively a moment of major economic challenge; we've got to pull together, we’ve got to work together, we've got to find a way through this," he said.
Risks of 30% tariff 'exceptionally high'
Minister for Public Expenditure Jack Chambers has said that a 30% trade tariff that may be imposed by the US would have a severe impact on the Irish economy.
Speaking on RTÉ's News at One, he said the risks were "exceptionally high".
"The threat of a 30% tariff on EU imports into the US would be really serious in the context of the Irish economy, it would have a severe impact on growth, it could result in significant job losses and would really disrupt the international trading environment upon which the Irish economy is built," he said.
"That is a significant risk in the context of budgetary planning, and that's why fiscal restraint will be really important, particularly as we plan for Budget 2026.
"Within that, we need to see a moderation of current expenditure and also, we need to significantly address the infrastructure deficit that exists within the Irish economy.
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"That's why, notwithstanding the broader economic risks that exist as a Government, we're really clear on the need to utilise the review of the National Development Plan to really drive investment and transform infrastructure in our economy.
"We'll set out that ambition next week in the measures that we take to support the advancement of transport, energy and housing infrastructure in particular."
Mr Chambers said that Mr Trump's threat of a 30% tariff had "changed everything".
"It changes everything in the context of the trading relationship between the EU and the US. We know from the Department of Finance that a 10% tariff would slow jobs growth and would also impact overall growth in the Irish economy.
"30% would have much more severe and deep consequences for Ireland and for jobs within Ireland, and we would have to assess that in the context of our medium-term fiscal planning," he added.
Mr Chambers said it was unclear whether an offer of a lower 10% tariff could be achieved.
"30% has been outlined by the US. We support the negotiation process that's underway with, and is continuing between, the EU and the US.
"We’re constantly engaged with the European Commission on trying to ensure a mutually beneficial outcome, but 30% would create serious and damaging consequences, but the the outworking of the deal is unclear at this point," he said.
Labour TD George Lawlor has said that US tariffs of 30% on EU imports could "end trade" between the EU and US.
Speaking to reporters at Leinster House, Mr Lawlor referenced EU trade commissioner Maroš Šefčovič by raising the situation.
He added that "30% tariffs have not been modelled" and that the issue is causing "a lot of unease".
Aontú leader Peadar Tóibín warned that Ireland is at the "precipice of the biggest economic crisis facing this country since the banking crisis".
Mr Tóibín said the tariff war has the "potential to destroy tens of thousands of Irish jobs".
"Ireland is one of the most exposed countries in the EU to the US tariff war," he said
"Last year we exported €72.6bn worth of goods to the US."
He said the approach of other EU countries who are "less exposed than Ireland" seem to be "having more of an influence".
He said Ireland needs to use its leverage and influence with the US " in relation to our national interests."
Additional reporting Reuters
