Spanish prime minister Pedro Sánchez criticised the “unprecedented” US tariffs calling them out as a return to “19th-century protectionism,” as he proposed a new €14.1bn package to support the economy in response to Trump’s move.
He also said that Europe should deploy a package of counter-tarrifs and other measures in response, and set up an aid fund financed from revenues from tariffs imposed on the US in return.
In a particularly punchy comment, reported by Reuters, Sánchez said that Europe now faces a trade attack from the West, just as it responds to a military attack from Russia in the East.
The Spanish prime minister is still speaking, and we will bring you more from him soon.
Let’s bring you some more comments from Spanish prime minister Pedro Sánchez’s speech earlier.
He said Spain would move past “this unfair and unjustified crisis into which some people have decided to plunge the world” and would not allow itself to be “dragged into zero-sum-game thinking or into a way of seeing the world that is guided by fear, disinformation and short-termism”.
In a final rebuke to Trump, he added:
“We will continue to push for a just distribution of wealth, for environmental sustainability and for equality between men and women.
We will keep working for European integration, we will keep defending multilateralism, we will keep opening ourselves to the world, and we will keep looking for partners who respect our interests and who also share our values.”
Micheál Martin gets asked specifically about the potential problems for the country’s pharmaceutical industry (13.50).
He says his government needs to “maintain engagement” with US officials to “convey the complexity of the pharmaceutical story,” as he points out that Ireland operates “as part of a complex supply chain” with “physical infrastructure” that is “not easily relocatable overnight.”
He warns there is “a real danger of undermining your own companies, the US companies, by proceeding precipitously or in a premature way.”
He also is asked about proposals to introduce a European digital services tax.
“We do not favour a digital services tax,” he says, adding that the EU’s response needs to be “considered … measured,” and “one that is clearly calculated and calibrated not to bring more damage upon the European economy and European citizens.”
“The desired outcome is negotiations between the US and the European Union,” he says.
And that concludes their press conference.
Elaborating on the EU’s planned response to US tariffs, EU commissioner McGrath expands a bit by saying the focus is on “on preventing the harm rather than responding to the harm.”
“We’re still in a scenario where we’re looking at potential [harm], and while sentiment is immediate and uncertainty has immediate impacts, the direct impact of tariffs is something that will take some time to work its way through the system,” he says.
He also pushes back against Sánchez’s suggestion to create an EU aid fund for companies affected, saying it is “premature.”
“When you talk about an EU fund, there aren’t many potential sources of funding. Is it additional member state contributions? Is it new own resources? Is it collective borrowing? Is it reallocation of resources from one part of the budget to another? So we’re not in that space, because our focus is on negotiations,” he says.
Martin and McGrath also get asked about Netanyahu’s visit to Hungary earlier.
The Irish prime minister Martin says he is “concerned about trends within Hungary”, as he says “there are procedures there in term of dealing with member states who we believe have either transgressed the rule of law or are not really behaving in the full spirit of EU unity”.
“We’ve fully supported the ICC. We’ve provided significant funding, additional funding above any per capita contribution to the ICC. International rule of law is extremely important, and Ireland will continue to adhere to it,” he says.
Commissioner McGrath speaks in a similar vein, adding that “the concerns that we have in the Commission about rule of law related issues [in Hungary] are well documented.
“Unfortunately, this is another retrograde step from the Hungarian authorities. Let’s see what happens over the period ahead,” he says.
After his comments on protection jobs and the economy, Irish prime minister Martin gets asked if there are any plans to offer support to businesses affected.
He says that “it is somewhat early yet to be talking in terms of support”, as he adds: “I think this is not the end of the story.”
“My view is that there will be a period of engagement. So we have to see where this settles. And every crisis is different. So the kind of supports that were in the previous crises may not apply in this case, I think,” he says.
He then gets pressed on whether Ireland will face a recession.
“I think we it’s important that we take in on board that this, I think, has some distance to go yet. And we don’t yet have a clear settled pattern as to what the permanent situation will be there is no,” he says.
“There is no doubt that we the world has changed, and the old order … is gone, but the new order hasn’t yet been precisely determined. In other words, I anticipate negotiations,” he added.
He says the tariffs will “impact every member state”, and expresses broader concerns about the worsening economic environment.
“The world, the business people, and investors want certainty, stability, predictability, they don’t have that at the moment. And that’s my overarching concern,” he says.
Speaking after Martin, EU commissioner McGrath says the EU’s response will be “very carefully calibrated,” but the EU is “ready to negotiate” with the US.
He offers a helpful data-backed estimate on the exact impact of the measures announced by Trump:
The current provisional estimate is that, overall, about €380bn of EU exports will be subject to the additional tariffs.
That comprises of approximately €290bn subject to the so called reciprocal tariffs. €26bn subject to US Section 232 tariffs on steel and aluminum and €67bn euro subject to US Section 232 tariffs on cars and car parts.
This would represent, overall, around 70% of all exports to the US being subject to new tariffs that have been announced yesterday and indeed in recent days, which would result in around €80bn euro in additional duties on EU exports to the United States.
Irish prime minister Micheál Martin is speaking at a press conference in Dublin right now, alongside EU justice commissioner (and former Irish finance minister) Michael McGrath.
He says:
Ireland believes in open and free trade, and that the imposition of tariffs is bad for the world economy.
I deeply regret the United States decision to impose 20% tariffs on imports from across the European Union. We see no justification for this.
He adds Ireland will work with EU partners to “reflect” how to respond, and stressed that any response would have to be “considered and measured.”
“Now is a time for dialog, and I believe that a negotiated way forward is the only sensible one. A confrontation is in no one’s interests,” he adds.
But he admits that “there is no doubt that the imposition of tariffs by the US will have an adverse impact,” saying the focus will be on protecting jobs and the economy.
“It is important that we focus on factors that we can control, including improving our competitiveness and investing in infrastructure.
By working with Irish-owned companies, with multinationals based here, with our European Union partners, and bilaterally with the United States, we can and will weather this storm.”
European Commission chief Ursula von der Leyen is to meet pharma leaders next Tuesday amid fears that Trump is not yet finished on his “rebirth” project and is highly likely to introduce further tariffs.
“We do expect further measures. We do fear and suspect that pharmaceuticals is next,” said a senior EU official on Tuesday.
It means Ireland, which Trump accused of stealing the US’s pharma industry, is not yet out of the woods and could be hit by a double whammy of reciprocal tariffs and sectoral tariffs on medicine exports.
The EU’s fears are based on the US administration’s listing of five sectors as strategically important to the country with tariffs only imposed on two so far: aluminium and steel; and cars. This leaves lumber, pharma and semiconductors still on the table.
“They have identified pharma and semiconducts as strategic for manufacturing to the US … We believe that the likelihood is quite high, so we would be quite unsure whether one could breathe a sigh of relief that pharma was not hit yesterday,” said an official.
There are 90 pharma plants in Ireland run by US giants and others exporting everything from Viagra, Botox, Accuvue contact lenses to cancer, arthritis and cardio drugs, accounting for €44bn of the country’s €72bn exports to the US.
The US buys another €14bn worth of medical related products such as surgical equipment and devices like stents.
Donald Trump’s tariff plan could undermine the Brexit deal between the EU and the UK for trading arrangements in Northern Ireland, a highly sensitive agreement designed to maintain the 1998 peace pact.
As part of the president’s attempt to spur on a “rebirth” of the US, Trump has imposed a two-tier tariff rate on the island of Ireland – with a 20% tax on exports from the republic but a 10% rate on the UK including Northern Ireland.
A former EU commissioner has questioned whether Trump thought through his plan’s effect on the peace process brokered by the US almost 30 years ago.
Although it could put Northern Ireland at an advantage over the Republic of Ireland for exports such as whiskey and dairy produce, a political problem could arise if the EU retaliates with like-for-like tariffs of 20% on US imports.
Under the Windsor framework, the EU tariffs will apply in Northern Ireland, creating a manufacturing price difference between Northern Ireland and Great Britain for any important components from the US.
European stock markets have had a rough morning.
Banks and miners have fallen on fears of an economic downturn. Luxury goods stocks are also lower, an anticipation that their exports to the US will be hurt by new tariffs.
Here’s the situation at 1pm CEST, or midday BST:
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FTSE 100: down 130 points or -1.5% at 8477 points
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Germany’s DAX: down 496 points or 2.2% at 21,894 points
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France’s CAC: down 195 points or 2.5% at 7,662 points.
For more reactions, follow our Business live blog with Graeme Wearden:
Polish prime minister Donald Tusk said the introduction of new US tariffs “may reduce the Polish GDP by 0.4%,” with losses estimated at around €2.4bn.
“A severe and bitter blow, because [it comes] from our closest ally, but we will survive it. Our friendship must stand the test,” he said in a social media post.
Poland exports goods worth €11.6bn to the US, according to most recent Eurostat data.
Spain’s prime minister, Pedro Sánchez, has lambasted Donald Trump’s “protectionist” tariffs against EU products, saying they run “contrary to the interests of millions of citizens on this side of the Atlantic and in the US, who will unfortunately see their businesses and their purchase power” affected by the measures.
In an strongly worded and defiant speech in Madrid on Thursday morning, the socialist leader said the “wrongs of one leader” should not be allowed to impede majority progress, adding that Spain and the EU would use Trump’s “trade war” to become stronger.
“This tariff attack from the US administration does not distinguish between friends and enemies,” he said. “It does not distinguish between ideologies and trade balances. It goes against everyone and everything.”
Sánchez said it was simply not correct top say that the EU had put tariffs of 39% on US products. “That’s not true,” he said. “In fact, if we take a proper look at the figures, the EU only applies tariffs of around 3%, depending on the case … And it isn’t true that our commercial relationship is unequal: the trade balance between the EU and the US in goods and services is almost even.”
As a result, said Sánchez, the tariffs announced by Trump were not reciprocal but were instead an excuse for “punishing countries and applying a sterile protectionism” in an effort to mitigate the US deficit.
“No one will benefit from this,” he said. “No one. A trade war will affect everyone – Europe included – but it will most affect the person who’s unleashed it. That is why we once again call on President Trump to reconsider and to sit at the negotiating table with the EU and the rest of the world.”
Sánchez described the tariffs as an “unprecedented” and “unilateral” US attack on Europe, adding: “Returning to the protectionism of the 19th century isn’t a smart way of tackling the challenges of the 21st century.”
While Europe’s hand would always be outstretched to its friends in the US, Sánchez added: “That doesn’t mean that we’re going to sit here with our arms crossed. The EU must react in the way the Spanish government has always supported: proportionately; in a unified manner and with the strength we have as an extraordinary trade bloc and the primary global trade bloc.”
Sánchez said the EU needed to speed up the integration of the single market when it came to regulations, digital services and financial flows. He said it also needed to grow and diversify its commercial links with the rest of the world, and roll out the package of counter-tariff measures that the EU had been working on for months.
“The Spanish government will not wait around to see what happens in the coming days and weeks,” he said. “We will respond, as we always do, in an anticipatory manner so that we’re ready.”
The prime minister announced a €14.1bn “response and commercial relaunch plan” designed to mitigate the “negative impacts of the trade war unleashed by the Trump administration” and protect the Spanish economy.
If the predicted storm came, he added, “Spain will have a double umbrella: European and Spanish”.
The package of measures will include €7.4bn in new financing, and the rest will come from existing instruments such as soft loans, he said.
Sánchez compared the plan to his government’s efforts to tackle the economic fallout of the Covid pandemic, saying it would focus on protecting businesses and jobs through the provision of credit and financing lines.
“It’s obvious that there’s no point in me pretending – and nor would I – that the situation isn’t complicated and difficult,” he said.
He added:
“The trade war unleashed by President Trump is dire news for the world, for the US, for Europe and for Spain. In Europe, if we look to the east, we see attacks from an evermore belligerent Russia. And now we’re seeing a trade attack coming from the west. No one in Europe or in Spain is going to be immune to these attacks. But that doesn’t mean that we’re going to stop growing or progressing. It doesn’t mean that at all.”
Hungarian prime minister Viktor Orbán is now speaking at a joint press conference with Israeli prime minister Benjamin Netanyahu.
Opening the meeting, Orbán offers more detail on Hungary’s reasoning behind its plans to withdraw from the international criminal court in The Hague in the Netherlands.
Noting that he originally signed the document confirming Hungary’s accession to the ICC in 2000, he says the Hungarian government is “convicted that this become a political court” with its biases and “motivated by political intentions.”
“I do believe that this otherwise very important court was diminished into a political forum, and we do not wish to have any parts in it,” he said, confirming plans for legislation to formally withdraw from the Rome Statute.
Responding, Netanyahu calls it a “bold and principled decision” as he says “it is important to stand up to this corrupt organisation.”
For more context, read this story from Jon Henley:
The Israeli prime minister doesn’t stop there as he speaks of “a deep friendship, a deep alliance” between Hungary and Israel, ranging from investment, technology, defence and even sports.
“But I would say that our cooperation goes deeper than that, because I believe we are fighting a similar battle for the future of our common civilization, our Judeo-Christian civilisation,” he says, positioning Israel and Hungary against “radical Islam” represented by Iran and “its proxies.”
“We will smash the Iranian terror axis, which threatens not only us, but Europe and many of our neighbours in the Middle East,” he says.
They don’t take questions.
EU trade commissioner Maroš Šefčovič said he will speak with US counterparts on Friday as part of the bloc’s response to last night’s announcements.
In a social media post, he said:
Unjustified tariffs inevitably backfire.
We’ll act in a calm, carefully phased, unified way, as we calibrate our response, while allowing adequate time for talks. But we won’t stand idly by, should we be unable to reach a fair deal.
I’ll speak to my U.S. counterparts tomorrow.
