There is no doubt there is a “serious level of risk” of what could occur to the Irish economy if tariffs were imposed, with the Department of Finance currently undertaking scenario planning, the Minister for Public Expenditure has said.
Jack Chambers said tariffs would impose greater costs on households and businesses and would disrupt overall trade on Thursday.
The Minister’s comments come after US president Donald Trump threatened to impose 25 per cent tariffs on imports from the European Union.
“We have made a decision and we’ll be announcing it very soon,” Mr Trump said when questioned about his plans for EU tariffs. “It’ll be 25 per cent generally speaking, and that will be on cars and all other things.”
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Mr Chambers said the US president’s announcement reflected the “growing levels of risk” around the Irish economy in terms of the geopolitical situation unfolding.
“There’s significant downside risks to Ireland’s economic position presently – deglobalisation, the imposition of tariffs – all represent risk going forward in the short to medium term,” he told reporters in Dublin.
“It [tariffs] will have significant disruption to well embedded supply chains, transatlantic in nature between Ireland, Europe and the US, and will impose serious costs on workers, families and businesses, both in the European Union but also in the US and will negatively impact everybody involved.”
[ Donald Trump says he will impose 25% tariffs on imports from EUOpens in new window ]
The Minister said “careful consideration” was being undertaken by the Department of Finance, in terms of trying to calibrate the respective impacts of tariffs which could “crystallise”.
He said if tariffs were imposed the Government would look to mitigate their effects and “obviously respond back”. The Fianna Fáil TD said they as well as Europe would have to work to protect workers and businesses. Mr Chambers also said Ireland has one of the most open trading economies in the EU.
“When tariffs are imposed we have a serious level of risk when it comes to what could occur for the Irish economy, there’s no doubt about that, and that’s why we’re a constant advocate for international trade. It’s the backbone of our economic model.”
Separately, Minister of State Thomas Byrne said the Government should take care not to “overreact to every single statement or comment that comes from America” despite concerns regarding proposed tariffs on the EU.
Asked to comment on the impact of 25 per cent tariffs on Europe, Mr Byrne said: “He hasn’t announced them, he’s suggested that tariffs will be in that region, he said it previously about Canada and Mexico.
“It’s important that we don’t overreact to every single statement or comment that comes from America. I think that’s proved to be a useful strategy in the past.”
[ How will Ireland respond to Trump’s tariff threat?Opens in new window ]
Mr Byrne noted that while tariffs would be bad for Europe, they would also be bad for US industry.
“I would imagine that the Trump administration is reflecting very, very carefully at the moment,” he said. “They’re probably considering what the blowback on their industries and their economy will be.”
EU trade commissioner Maroš Šefčovič continues to engage with European counterparts on the issue, he said, noting that Irish officials would be in Washington, DC, soon where they will continue engagement with the Trump administration.
Mr Byrne was speaking in advance of Thursday’s Council of Europe conference in DCU held to mark the third anniversary of Russia’s invasion of Ukraine and to discuss peace, justice and accountability for Ukrainian people.
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