Coalition leaders are to discuss moves to bolster Irish competitiveness amid efforts to shield vulnerable sectors from the fallout of a looming US-EU trade war.
With US president Donald Trump expected to announce tariffs on a swathe of EU exports this Wednesday, Tánaiste Simon Harris warned it is “vital” that Ireland “accelerate measures to further increase our competitiveness and strengthen our position as a good location in which to invest and create jobs”.
He said Ireland must “control what we can control and influence what we can influence”.
Taoiseach Micheál Martin spoke to European Commission president Ursula von der Leyen on Sunday, saying he “raised Ireland’s particular focus on the food, drinks and pharma industries”.
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The imposition of tariffs on EU goods is expected to lead to retaliatory action by Brussels which could expose some Irish exporters to significant costs if the US in turn targets their sectors.
Ireland’s EU Commissioner Michael McGrath said “we are unquestionably at a critical juncture right now”.
“The unknown at this stage is whether the US wants a negotiated settlement or whether it is wedded to the idea of tariffs as a permanent economic measure,” he told The Irish Times.
On Sunday, Minister for Enterprise Peter Burke told RTÉ the Irish economy needs to “sharpen up” on competitiveness issues. Coalition leaders will be briefed by Mr Burke on Monday night on what he described as “quick wins” to improve competitiveness, including legislating for the use of “private wires”, which allow individuals or energy users to run their own cables to transfer electricity. He also flagged reforms to security clearance through Enterprise Ireland and Environmental Protection Agency licensing reform.
Fine Gael sources also pointed to programme for Government commitments to cut red tape for firms as a priority, as is a promised cut in the VAT rate for hospitality. However, expansive pandemic-style supports for businesses are not on the table as of now.
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Minister for Trade Mr Harris is expected to ramp up engagement with his European counterparts before the imposition of tariffs, and will brief Cabinet on the latest tariff developments on Tuesday.
He wrote to EU trade commissioner Maroš Šefčovič in recent days flagging concerns about the spirits and dairy sectors being caught up in a trade war if Brussels goes ahead with planned tariffs on US products in these sectors.
The Irish Whiskey Association, in a submission on tariffs to the European Commission, warned tariffs on American spirits could lead to their members being targeted and outlining their concern such EU tariffs “would be ineffective and disproportionate”.
In the coming week, Ireland is likely to seek allies in Europe to argue against the EU including pharmaceutical goods on its list of retaliatory tariffs. Mr Harris will have calls with his Dutch, Danish and Swedish counterparts – all three countries have significant pharma industries.
Following his call with Dr von der Leyen, Mr Martin posted on X that the pair had agreed the EU should be “measured and considered in any response, and focused on our own competitiveness and an ambitious trade agenda”.
Dr von der Leyen outlined her expectations for developments on tariffs this week, Mr Martin said.
Government sources here are cautioning that Brussels’ response should not hurt Europe more than the US.
Officials in the Department of Trade have warned that pharmaceutical tariffs could remain in place for an extended period which would impact on supply chains. If the EU imposed tariffs, Government sources said, it risks driving up the cost base of the sector within the bloc.
