US Secretary of Commerce Howard Lutnick has renewed his attack on Ireland, calling the country his favourite “tax scam”.
Mr Lutnick said Ireland has all of the US multinational technological and pharmaceutical intellectual property (IP) rights and this deprives the United States of tax revenue.
“That’s gotta end,” he told the All-In podcast, aimed at venture capitalists in Washington DC.
Mr Lutnick erroneously claimed that Ireland had a $60 billion (€55.4 billion) surplus last year. In fact the budget surplus was €25 billion ($27 billion), which included a once-off €14 billion Apple payment.
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He told the podcast: “So we lose two trillion and they make 60. You’d say, Ireland, what do they do? Oh, they have all of our IP for our great tech.
“All our great tech companies and great pharma companies. They all put it there because it’s low tax and they don’t pay us. They pay them. So that’s got to end. So when those things end, tariffs, Trump card, getting rid of tax scams to get fair tax, that’s my trillion.”
Mr Lutnick, a long-time friend of President Donald Trump and one of the biggest advocates of global tariffs, has long targeted Ireland as a potential source of revenue for the US Treasury.
He told Fox News last week, a day after Taoiseach Micheál Martin visited the White House, that Ireland was a “tax scam” and he inflated Ireland’s budgetary surplus further, stating it amounted to $75bn (€71bn).
Meanwhile, the Government is likely to provide some support to businesses hit by a trade war between the EU and the US, but will rule out Covid-style funding packages, it is understood.
With predictions this week that US tariffs would inflict major damage on the Irish economy, export businesses are bracing themselves for the exchange of tit-for-tat tariffs next month.
On Friday, at a trade forum in Government Buildings with business leaders, Tánaiste Simon Harris said he wouldn’t “sugar coat” the situation, and warned them that early April could be a moment of “significant disruption”, officials briefed on the meeting said.
Efforts to avert a full-scale trade war are also under way, with European Commission officials saying that they had suspended the planned imposition of tariffs on certain US products, including Bourbon whiskey, from the start of April.
The suspension was partly as a result of lobbying by Ireland and France, anxious to protect their wine and whiskey exports to the US. President Donald Trump had threatened to impose 200 per cent tariffs on EU alcoholic drink imports to the US in response to the EU’s move.
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The EU, however, still plans to hit US imports with tariffs in mid-April if the US goes ahead with its planned tariffs on April 2nd. Officials said that contacts were ongoing with the Trump administration to avoid a trade war, but were not optimistic that peace would break out in the coming weeks.
Choosing how to respond to the US tariffs is a delicate task for the European Commission, which handles trade issues for the EU as a whole, because different countries have different exposures to various kinds of exports.
On Friday, Taoiseach Micheál Martin warned in Brussels that there was “a danger of significant division across the EU” in a sector-by-sector approach.
Should a trade war go ahead next month, senior sources say that the Government is open to providing balance sheet assistance through instruments such as low-cost loans to firms especially exposed, and advice on pivoting to non-US markets.
Across-the-board payments in the face of an economic slowdown are not currently on the table. The model being considered is more in line with supports associated with the fallout from Brexit, rather than the pandemic or the cost-of-living and inflation crisis which followed, sources said.
“It’s not Covid,” one figure said, ruling out across-the-board payments to businesses like those made during the pandemic. A second source concurred: “There’s a strong belief we shouldn’t be entering into that space.”
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Civil servants are studying where the impacts may fall in the economy as well as pushing Irish messages at an official and political level in the EU.
