Eurogroup President Paschal Donohoe Breathes a Sigh of Relief as US and China Agree to Roll Back Tariffs
U.S.-China trade tensions appear to be easing, as expressed by the Eurogroup president.
In a drastic turn of events, United States President Donald Trump and Chinese leader Xi Jinping have agreed to significantly cut the tariffs they've imposed on each other's goods - a move that hints at a de-escalation in one of the world's most crucial trade relationships.
The announcement, made at the White House, follows weeks of economic tension. Washington had previously imposed punishing tariffs of up to 145% on Chinese goods, sparking anxiety about prolonged disruption in global trade flows. Now, under the new agreement, both countries will ease tariffs for 90 days, according to Trump who declared a "total reset" in US-China relations. He also expressed his belief that the 145% tariff rates won't resurface in the future.
In an exclusive interview with our site, Eurogroup President and Irish Finance Minister Paschal Donohoe hailed the decision, calling it a promising moment for EU-US relations.
"It's extremely encouraging. It's also a reminder of the volatile era that we're in," Donohoe said. "But amidst that volatility, China and the US recognizing the value of trade and how that trade relationship can have such a significant effect on the performance of their own economies."
"However, it's clear that a lot of work needs to be done following this, particularly in terms of the engagement that the EU has with the US," he added.
Donohoe's comments underscore a broader desire for renewed momentum in international trade, one that could extend into EU-US negotiations where tariff issues remain unresolved.
A Cautious Response
The European Commission continues to deliberate its trading strategy with the US. In Donohoe's view, a consensus-driven approach is best. Specifically, he reiterated his long standing opposition to the digital services taxes some EU member states, notably France, have proposed as a means to combat tax avoidance by large digital companies.
"Ireland and I have longstanding concerns regarding the role and use of digital services taxes, and my sense is that, in the debate that is now taking place, it's understood as an option but it's also understood as an option that could have very significant consequences," he explained.
The issue has become a contentious one within the EU, with France and Germany supporting the introduction of digital services taxes, while Donohoe frames the varied views within the bloc as a source of strength rather than division.
"It's inevitable in a negotiation like this that different members of the European Union will have different views," he said. "What we will do is listen to each other and find a balanced outcome regarding options that we may need to take now and other options that might need to consider in the future."
Nonetheless, he acknowledged that several member states remain deeply worried about the broader economic and diplomatic consequences of targeting digital services, considering the ongoing EU-US trade talks.
"It is fair to say that there are a group of countries within the European Union that would have significant concerns regarding the use of digital services taxes and the spillover effects that it could have on the trade negotiations and the health of the economic flows between the EU and US."
The Commission's Dilemma
Donohoe also addressed the mounting pressure on the European Commission as traditional avenues for tariff negotiation become increasingly limited, particularly in areas like digital services where trade deficits and tax disputes persist.
- Finance
- European Union
- tariffs
- US-China tensions
- United States
- European economy
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There seems to be some confusion in the query. The search results do not mention a 90-day tariff rollback agreement between the US and China or comments from Eurogroup President Paschal Donohoe regarding this topic. However, here is an update on the current status of EU-US trade negotiations based on the available information:
EU-US Trade Negotiations Status
- Tariffs and Negotiations: The EU and US are engaged in trade negotiations, but there are challenges, particularly regarding tariffs. The US maintains tariffs on EU goods, including steel and aluminum, and there are discussions about possibly maintaining some tariffs even if an agreement is reached[1].
- Recent Developments: Italian Prime Minister Giorgia Meloni visited the White House in April to discuss a tariff deal. The EU has proposed moving towards reciprocal tariff-free trade, but the US might not agree to eliminate all tariffs[2].
- EU Countermeasures: The EU has launched a public consultation on potential countermeasures against US tariffs, focusing on products like aircraft, automobiles, and medical devices[3].
- Tariff Adjustments: The US has adjusted steel and aluminum tariffs, and there are ongoing discussions about further adjustments and potential trade agreements[3].
Overall, while there are ongoing discussions and some movement in negotiations, significant challenges remain, particularly regarding tariff levels and potential retaliatory measures.
- Eurogroup President Paschal Donohoe, reflecting on the US-China tariff rollback agreement, emphasized the importance of a consensus-driven approach in EU-US negotiations, expressing his opposition to the digital services taxes proposed by some EU members to combat tax avoidance by large digital companies.
- Amidst the ongoing EU-US trade talks, Donohoe acknowledged the concerns of several member states regarding the use of digital services taxes and its potential spillover effects on the trade negotiations and the health of the economic flows between the EU and US.
