A sector-by-sector tariff approach by US president Donald Trump risks creating divisions among European Union member states, the Taoiseach has said.
Micheál Martin said that Ireland’s open economy is particularly vulnerable to the across-the-board tariffs that Mr Trump has pledged to impose on April 2nd and said the EU should take a measured, but firm, approach to any retaliation.
The bloc has to “take a broad-based approach to it because we can easily be sucked in to sector-by-sector, and there’s potential for significant division across the EU in terms of how we respond,” Mr Martin told Bloomberg TV. Mr Trump and his advisers have suggested that countries may face different tariff rates and will also take into account what they see as non-tariff barriers such as the value-added tax.
“We don’t quite know what the US is going to do,” he added. “There’s a lot of speculation around it. Europe is going to take a bit of time and hopefully it’s a calibrated response that is strategic in terms of protecting sensibly certain sectors that we don’t need to invite a huge retaliation on.”
Ireland’s small, open economy boasts one of the EU’s only budget surpluses, but now finds itself a target for Trump, who has said he wants to balance US trade deficits.
Ireland has one of the bloc’s biggest trade surpluses with the US, largely thanks to the outsized number of American multinationals based there for low tax reasons. That includes Apple and Pfizer.
Ireland exported €72.6 billion of goods to the US in 2024, up 34 per cent on the previous year. Imports of goods from the US, meanwhile, were €22.5 billion, a decrease of 2 per cent on 2023. It puts the Irish surplus with the US on a par with Germany and just behind Mexico and Vietnam.
Ireland maintains its trade surplus with the US in goods is offset by the services sector, including digital technology, which is calculated separately. Ireland’s deficit with the US in relation to services was €163 million last year, according to the country’s statistics office.
In a recent visit to the White House to mark St Patrick’s Day, Mr Trump repeatedly raised Ireland’s tax policies. “They took our pharmaceutical companies away from presidents that didn’t know what they were doing and it’s too bad that happened,” Mr Trump said.
Now, Ireland is urging the EU to remain unified and to prevent a tit-for-tat transatlantic trade war escalating even further. Mr Martin said in the interview that any additional tariffs could harm pharmaceutical companies, pushing up the price of medicines not only for European patients, but American ones too.
“This is something that has been thrust upon us. Europe will have to respond and it will have to respond firmly,” Martin said. “But the key message ultimately, I think, will prevail. It may take some time.” –Bloomberg
