The possibility of the State stepping in to support sectors hardest hit by US tariffs is something the Government was keeping “under review”, Tánaiste and Minister for Foreign Affairs Simon Harris has said.
Coalition sources in recent days rejected suggestions that there would be any return to the massive business support schemes seen during the Covid-19 pandemic.
Speaking in Luxembourg, Mr Harris indicated the Government might consider limited supports to “individual sectors”, who were particularly bruised by the expected disruption to transatlantic trade.
US president Donald Trump last week announced practically all goods imported into the US from the EU would be subject to 20 per cent tariffs. This follows import duties of 25 per cent already put on steel, aluminium and cars. Tariffs targeting pharmaceutical exports are expected as well.
“If there’s a need to support individual sectors as we go through this global financial challenge and the economic turmoil that president Trump’s announcements have caused, Ireland certainly will always keep that under review,” Mr Harris said.
“There’s an awful lot we can do in terms of controlling what we can control at a European level that would directly support European industry, European jobs and the European economy,” he said.
Exports of pharmaceuticals products, Irish whiskey and agri products, such as butter, are seen as most exposed in the event of a EU-US trade war.
There was “no scheme that any government can devise”, that would be better than a deal struck with the US to rollback its tariffs, the Fine Gael leader said.
Trade ministers from the EU’s 27 states met on Monday, to debate how the bloc should respond to tariffs Mr Trump has slapped on imports. Dublin is one of several capitals urging caution in how the EU retaliates.
Plunging global stock markets would increase the likelihood of the US administration coming to the negotiating table, Mr Harris said. “We’re up for a deal. I suppose the outstanding question is, is the United States up for one?”
The European Commission, the EU executive arm which sets trade policy, has been finalising a list of US goods and products to hit with retaliatory tariffs.
It is expected to target imports of US motorbikes, denim jeans, soybeans and other products. EU states are due to vote on whether to approve the tariffs on Wednesday.
Following lobbying from Ireland, France and others, bourbon seems likely to be removed from the range of US products hit with counter-tariffs.
Dublin and other capitals were concerned by threats from Trump, that if the EU put import taxes on US bourbon, he would respond with tariffs of 200 per cent on Irish whiskey, French champagne, Italian wine and other spirits sold from Europe to the US.
The commission is already working on a second, much larger package of trade levies, to strike back against Mr Trump’s sweeping tariffs.
The suggestion US tech multinationals would be targeted in the EU’s retaliation, through the use of the bloc’s powerful anti-coercion instrument (ACI), would be an “extraordinary escalation”, Mr Harris said.
The instrument, which has never been used before, would allow the EU to seriously curtail the economic activity of social media giants and other US companies.
Turning to those emergency trade powers would be the “nuclear option,” when the focus should be on opening negotiations with the White House, Mr Harris said.
“I’m very clear from my engagement with multiple European counterparts, and our ongoing engagement with the commission, that the majority view is certainly not in that space of going near the ACI at this moment in time,” he said.
