After weeks of economic tensions escalated, the US and China agreed to significantly reduce the tariffs they imposed on each other. This is a decision to de-escalate in one of the world’s most important trade relations.
Washington previously punished tariffs of up to 145% on Chinese goods, prompting fears that global trade flows could lead to long-term disruption. Now, following a well-known announcement at the White House, US President Donald Trump has declared a “complete reset” in US-China relations. Under the new contract, both countries will ease 90 days of tariffs. Trump further said he did not expect a 145% tariff return at a later date.
In an exclusive interview with Euroneuz, Eurogroup Chairman and Ireland’s Finance Minister Pascal Donohoe welcomed the global economy moment, but not positive, to characterize it.
“It’s very encouraging and also reminds me of the volatility of our time,” Donohoe said.
“But in its volatility, China and the US are clearly aware of the value of trade and how that particular trade relationships have a very significant impact on the performance of their economy,” he added.
“And while I think it’s a positive signal, it’s also very clear that there’s a lot of work that has to flow from then on, especially in terms of the involvement the EU has with the US.”
Donohoe’s comments reflect a broader desire for new momentum in international trade that could ripple over EU-US negotiations, where tariff issues remain unresolved.
Measured approach
As the European Commission continues to negotiate its trade strategy with the United States, Donohoe has expressed support for a consensus-led approach. In particular, he repeated his long-standing opposition to the introduction of the Digital Services Tax (DST), which several EU countries, particularly France, proposed as a way to deal with tax avoidance by large digital companies.
“Ireland and I have been concerned for many years about the role and use of digital services taxes. My sense is that they are understood as options in the current discussion that is taking place, but also as options that can have very important consequences,” he explained.
This issue has become one of the more divisive issues within the EU. While France and, to some extent, Germany supported the introduction of DST, Donohoe emphasized the diversity of vision within the block, framed it as a source of strength rather than division.
“I think it’s inevitable in negotiations like this that different members of the European Union have different views,” he said.
“So, at the end of the day, it’s our strength, and what we do is listen to each other and find balanced outcomes on options that we may need to take right now and other options that we need to consider in the future.”
Nevertheless, he acknowledged that several member states are deeply concerned about the wider economic and diplomatic consequences of targeting digital services, particularly in light of the ongoing EU-US trade consultations.
“I think it’s safe to say that there is a group of countries within the European Union that say there are important concerns about the use of DST and the use and ripple effects of DST on the health of economic flows between the EU and the US.”
Committee dilemma
Donohoe also tackled the growing dissatisfaction of the European Commission as traditional means of tariff negotiations are increasingly limited.
Pressure on action is increasing in areas like digital services where trade deficits and tax disputes continue.
