The Minister for Public Expenditure has said US tariffs would be extremely damaging and disruptive for an open economy like Ireland.
Jack Chambers said that when the Taoiseach meets with US president Donald Trump in the Oval office next week he will emphasise the “broader balanced relationship that exists in economic terms” between the two countries.
The Department of Finance and other government agencies have been carrying out “extensive contingency planning” to combat any possible “disruption and damage” to the Irish economy from US tariffs, Mr Chambers said.
Tariffs were economically counterproductive, he told Newstalk radio on Thursday morning. “[Tariffs will] have serious disruption to integrated global supply chains that lead to higher costs for consumers. Increased inflation and protectionism damages economies.”
It comes as president Trump continued his aggressive trade plans earlier this week, targeting Canada and Mexico with import tariffs of 25 per cent.
Mr Trump and his administration have claimed higher tariffs on US imports will help it gain leverage over allies and rivals around the world.
But experts have warned that trade barriers could hurt both the US and other countries’ economies, including Ireland.
Ireland is the one of the world’s largest exporters of pharmaceuticals, according to the UN International Trade Statistics database.
In 2023, the US was the top country for Irish goods exports, with Americans buying products worth €54 billion. Of that, some €36 billion related to pharmaceuticals and chemicals.
Pharmaceutical products are normally excluded from tariffs because of a World Trade Organisation agreement that dates back to 1994.
However, speculation is growing that Mr Trump may continue to upend international norms and include pharmaceutical products in any tariffs against the European Union.
Mr Chambers acknowledged Ireland was vulnerable and tariffs would pose a “significant downside risk for the Irish economy.”
“We are exposed in the context of the broader geopolitical issues as they’re crystallising and changing nearly every day.”
Mr Chambers said that either a blanket tariff announced across the EU or a more product or sector specific tariff, would both be “significantly damaging because our whole economic model is on the basis of international trade, and we’ve got a very diversified export model across many different sectors.”
The Minister said extensive work had been carried out in the Department of Finance on “scenario planning” for all potential impacts from tariffs.
“What we’re doing is calibrating the variety of responses that we would make in the context if tariffs will be imposed so we can try and protect Irish interests and also businesses and workers.”
Ireland
How vulnerable is Ireland to Trump’s tariffs?
In a later interview with RTÉ’s Morning Ireland, the Minister refused to speculate on the impact on the pharmaceutical sector.
“Planning has been conducted by the Department of Finance on the impacts of tariffs. And we know that, for example, at the moment it’s about 1 per cent between the US and the EU.
“If that goes to 25 per cent, that will have a significant and turbulent impact across the European economy, including Ireland, and we’re calibrating the respective responses which might be required to protect consumers and businesses.
“But they’re all downside risks. And that’s the broader context in which we reside with deglobalisation and disruption to international trade part of the emerging norms now. And that’s why our overall economic management is central to protect Ireland for the future.”
