Amid global condemnation of the announcement of import tariffs by Donald Trump, Ireland has urged caution on EU leaders and officials preparing the bloc’s response to the US move.
Taoiseach Micheál Martin said that the European response should be “considered and measured and the action should be proportionate, aimed at defending the interests of our businesses and citizens”, while several senior sources confirmed that the Irish Government was privately urging the EU not to escalate the brewing trade war.
Ministers and senior officials emphasised the need for caution in the Irish response – one warning against “talking ourselves into a misplaced retaliation” – despite more aggressive comments from some figures in the European Commission and some member states.
On Wednesday, Mr Trump announced swingeing tariffs on imports into the US, with a rate of 20 per cent on goods from the EU and 10 per cent from the UK.
Officials said the Taoiseach would engage with the United States and the EU, and with pharmaceutical companies, but declined to give details, citing the sensitivity of the issue.
[ Trump’s tariffs: what do they mean for Ireland and the economy here? ]
Though EU capitals stressed the need for unity in the face of the US tariffs, with national interests on trade issues sharply diverging, there were some signs of division.
The French government has raised the idea of a digital services tax on tech companies, while putting tariffs on services targeting US tech multinationals has also been floated – both proposals likely to be opposed by the Irish Government.
Commission president Ursula von der Leyen made a short statement on Thursday morning, but trade commissioner Maroš Šefčovič is due to speak to his US counterparts on Friday. “We’ll act in a calm, carefully phased, unified way, as we calibrate our response, while allowing adequate time for talks. But we won’t stand idly by, should we be unable to reach a fair deal,” Mr Šefčovič said.
Senior officials in the commission, the EU’s executive arm that leads the bloc’s trade policy, are exploring options to put pressure on the US to negotiate. “We are not taking anything off the table today, we are looking at all possible issues,” one senior commission source said on Thursday. There is a growing feeling, however, that negotiations are unlikely until a strong response inflicts some economic pain on the US.
An initial batch of tariffs targeting €26 billion worth of US exports, from soybeans to motorbikes, is due to be signed off by EU capitals next week.
However, following lobbying from Ireland, France and Italy, bourbon looks set to be removed from the list of US products expected to be levied with tariffs. Mr Trump had promised to respond to tariffs on bourbon with even higher tariffs on imports of Irish whiskey and French and Italian wines. French president Emmanuel Macron said an even larger package of EU tariffs on US goods would follow the one already on the table.
EU officials expect Mr Trump to circle back to the pharmaceutical sector – which has not been hit with tariffs so far – potentially hitting pharma exports to the US with tariffs of about 25 per cent. “We do fear and suspect pharmaceuticals are next,” one source said.
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Amid fears over the impact of a trade war on the Irish economy and the public finances, Ministers have been reluctant to make any concrete commitments to financial support for homes and businesses in light of the potential economic fallout – preferring to focus on efforts to reform the domestic economy and improve productivity. One senior figure flatly ruled out Covid-style wage supports.
On Thursday, Minister for Finance Paschal Donohoe outlined exchequer figures showing high employment and consumption, but warned that US tariffs would hit families, businesses and job creation.
Revenue collected €21.9 billion in tax in the three months to the end of March and Mr Donohoe said the returns showed the State was “at least” facing the threat of Mr Trump’s tariffs plan with a resilient economy.
Mr Martin is to attend the Labour Employer Economic Forum on Friday, with economic and trade developments top of the agenda. Senior officials and Cabinet Ministers Mr Donohoe, Peter Burke and Jack Chambers will also attend.
Tánaiste Simon Harris is to chair a meeting of the Government’s trade forum focused on the tariffs, with discussions expected to include the potential threat of further levies on the pharma industry.
With regards to Northern Ireland, Mr Harris is also expected to say there is an “immediate North-South challenge” due to the US tariff differential between Ireland and the UK. A Cabinet source said the Government was to open channels with London on the issue, expressing the hope that UK prime minister Keir Starmer’s desire for improved links with the EU would lead to close co-operation.
Global stock markets nosedived in response to the tariff announcement, while the value of the dollar also plunged. Analysts warned that investors should prepare for further falls amid expectations of further tariffs and a potential global trade war. Many companies – and their shareholders, including million of Americans anxiously watching their retirement savings – saw their value slashed; tech giant Apple saw its value crash by $250 billion.
The Trump administration sought to soothe jumpy Republicans, but also to prepare the US public for a period of turbulence.
“What I’d ask folks to appreciate here is that we’re not going to fix things overnight,” US vice-president JD Vance told Fox News. “We are fighting as quickly as we can to fix what was left to us, but it’s not going to happen immediately.”
