A framework agreement on trade between the United States and the European Union (EU) was “tantalisingly close” before US President Donald Trump threatened to impose 30% tariffs on imports from the EU, Tánaiste (Irish deputy prime minister) Simon Harris has said.

In letters to the EU and Mexico, Trump warned he will impose even higher import taxes if either of the US trading partners decide to retaliate.

Harris said that when the letter threatening the tariffs came, “there was surprise because, genuinely from a European perspective, there was an expectation that a deal was in there”.

He added that there was and “remains absolutely space for a deal”, Irish broadcaster RTÉ News reports.

Earlier, the tánaiste said Ireland is “now at a moment of major economic challenge”.

Speaking on his way into Government Buildings in Dublin, Harris said the impact of 30% tariffs would be “extraordinary”.

He said Ireland is working alongside European partners to prepare for “every eventuality”.

“We’re going to have to pull together in the hours and days ahead as we try to navigate our way through the latest scenario in relation to trade tariffs,” the tánaiste said.

“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.”

Harris added that he believes Trump’s threats of tariffs are an effort to negotiate and apply pressure on other countries for a US trade deal.

“If you arrived in a scenario where there were 30% tariffs, the impact to that is extraordinary,” he said.

Mr Harris said 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.”

The EU has been a frequent target of Trump’s criticism.

On 2 April, he proposed a 20% tariff for goods from the bloc, as well as dozens of other trade partners. He then threatened to raise the EU import taxes to 50% as trade talks stalled.

Washington and Brussels had hoped to reach an agreement before a deadline of 9 July, but there have been no announcements on progress.

European Commission President Ursula von der Leyen said the EU remained ready “to continue working towards an agreement” by 1 August.