The Government is working “flat out” to prepare for the coming economic shock of expected US tariffs targeting the pharmaceutical sector and other industries, Taoiseach Micheál Martin has said.
United States president Donald Trump is due to announce sweeping tariffs on trade coming into the US, from the European Union and elsewhere next week.
The huge volume of trade the Irish pharmaceutical industry sells to the US is firmly in the crosshairs for tariffs, which are effectively taxes on imports.
Mr Martin, speaking on Thursday, said the Government did not underestimate the serious impact such measures would have on the Irish economy.
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Tánaiste and Minister for Foreign Affairs and Trade Simon Harris said it was “highly likely” there will be a “period of economic uncertainty and turbulence” and that it was essential to keep that period as short as possible.
“What I hope happens after the second of April is that very quickly the US agrees to get around the table with the European Union,” told Virgin Media, “…to work our way forward here because all disagreements need to end in agreement.”
Speaking in the Dáil on Thursday also, Minister for Finance Paschal Donohoe said the Government’s first priority was “how we engage with the United States of America and we acknowledge ... the difficulty of that engagement”.
“Second what we have made very clear is that engagement is now under way between Ireland and our partners within the European Union (EU) on what an appropriate response could be.
“Third, what the Government has been doing for many years, and will continue to do, is look at the measures that can be put in place to strengthen our budget, our jobs and our enterprise economy.”
Mr Trump this week announced a 25 per cent tariff on all foreign-made cars and trucks sold into the US, in a move that will hit German and other European carmakers.
The US president said his administration would be following up with broader measures on April 2nd, which would include tariffs on pharmaceutical imports. Mr Trump singled out the concentration of US pharmaceutical companies with manufacturing sites in Ireland, as industry he wanted to bring “back” to the US.
Ireland and other European states are bracing for what many fear will be steep tariffs on a potentially wide range of products and goods exported to the US.
Mr Martin said the priority would be to protect Irish jobs and encourage negotiations to avoid an EU-US trade war.
“We don’t understate the seriousness of the impact of such tariffs on the European economy, on the Irish economy,” the Fianna Fáil leader said. “So we are worried. We’re concerned about it, but we’re working flat out,” he said.
“I have been in touch with a number of multinational companies based in Ireland. We are keeping very close contact with the industry, to identify in a more detailed way, particular exposures of particular companies,” he said.
“We believe tariffs will damage the broader economies across the world, [they] will damage the American companies who are located in Ireland, not just here, but in America as well,” he said.
It would not be straightforward for pharmaceutical companies with bases in Ireland to “uproot” and relocate to the US, Mr Martin said.
The pharmaceutical supply chain between Ireland and the US was complex, he said. Manufacturing plants in Ireland often produced raw materials and other ingredients, which were then shipped to the US, where the medicines were “finished” for sale in the US market, he said.
Mr Martin was speaking to journalists in Paris, after attending a meeting of European leaders to discuss the war in Ukraine, organised by French president Emmanuel Macron. It is understood the Taoiseach discussed the looming US tariffs on the sidelines of the meeting.
The European Commission, the EU executive that proposes laws and oversees the bloc’s trade policy, has been encouraging the Trump administration to negotiate, rather than push ahead with its tariff plan.
The EU executive is preparing to levy retaliatory tariffs on more than €20 billion worth of US goods and trade, in response.
“I would hope that substantively, the EU and the US would engage in discussions to come to a sensible resolution. Otherwise a tariff [war] and a trade war will have very negative consequences for all involved,” Mr Martin said.
Acting Social Democrats leader Cian O’Callaghan claimed in the Dáil that Mr Trump’s “toxic love affair” with Ireland could cost us dearly and that the US president has “pharmaceuticals in his crosshairs”.
He expressed concern that EU retaliation could include sectors important to Ireland, which would have a detrimental impact. He asked the Minister if he was “confident the EU will take this sufficiently into account in deciding how to retaliate”.
