The United States proposal to impose “significant” tariffs on the European Union will likely proceed in early April, despite the bloc’s efforts to prevent this, Minister for Finance Paschal Donohoe has said.
In the “worst case scenario”, the tariffs could affect tens of thousands of jobs that would have been otherwise maintained or created in Ireland, while promised tax cuts may not proceed, the Minister said.
Speaking on This Week on RTÉ Radio 1 on Sunday, Mr Donohoe said the EU is continuing to negotiate with the US in a bid to prevent the tariffs from coming into effect next month.
“The balance of probability at the moment appears to indicate that there will be significant tariffs of some scale applied in early April, though every effort of course will be made to avoid that happening,” he said.
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Mr Donohoe said that if the US does “take very broad measures”, the EU, including Ireland, will need to respond.
Mr Donohoe said the Government has produced a set of forecasts outlining what may happen “if the worst case scenario was to unfold”.
“Over the medium term – and by medium term, we mean across a four to five-year period – it’s very possible that between 50,000 and 80,000 jobs that would have been created or kept within this economy won’t be,” he said.
In terms of tax cuts promised in the last Budget, Mr Donohoe noted that the Government “outlined a number of changes in personal taxation that we would like to make”.
“If we’re in a situation where we’re experiencing an economic shock, that wouldn’t be the right thing to do. The right thing to do would be to maintain your tax base, so that you’re in a position then where you can continue to invest in housing, you can keep your public finances safe, and you can look after day-to-day spending.”
Mr Donohoe said the economic fallout of any tariffs will be clearer come the next Budget in October.
Sinn Féin’s finance spokesperson, Pearse Doherty, warned about the potential impact of any EU counter-measures. Mr Doherty said the EU should not have a “knee-jerk” reaction to US tariffs.
During the week, a report by the Economic and Social Research Institute (ESRI) concluded that US tariffs could cost Ireland more than €18 billion in lost trade.
Meanwhile, Minister for Housing James Browne has said the number of apartments being built in Dublin is going in the “completely wrong direction” and needs to “drastically” improve if the Government is to meet its overall housing targets.
Mr Browne said “only time will tell” if recent reports indicating the Government could miss its housing targets this year and next year by several thousand homes are “right are wrong”.
“I think the collapse in apartment-building in Dublin city very much is driving those challenges around reaching those targets,” he said.
“At the moment the housing financial market in Dublin for apartments is broken. That is just obvious from the fact that nobody wants to build apartments. They are building apartments across Europe but not in Dublin.
“So we have to examine that taxation regulatory regime,” he said.
The Minister said private finance is needed to help tackle the housing crisis, and “unfortunately profit is part of that”.
On Thursday, The Irish Times reported that the State is on track to deliver less than 20 per cent of the apartments it aimed for under a scheme designed to deliver more homes for owner-occupiers in Dublin, Cork, Limerick, Galway and Waterford.
Mr Browne said “something quite radical” needs to be done to stimulate apartment-building in the capital in particular, noting tax breaks for developers must be among the options considered.
“Everything has to be on the table,” he said.
