The Government is facing growing pressure to roll out dedicated supports for firms and workers caught up in the fallout from Donald Trump’s tariff agenda amid mounting expectations that Brussels will hit back hard against the United States, worsening the nascent trade war.
But several senior Coalition sources were adamant that there would be no return to Covid-style schemes to counter the blow, amid concerns about the cost, extent and duration of shoring up firms against tariff pressures.
As stock markets continued to nosedive yesterday after Wednesday’s tariff announcements, the Chinese government announced a 34 per cent retaliatory tariff on US goods, prompting expectations in Dublin that the EU will hit back hard against the US in the coming weeks to increase pressure on the Trump administration.
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On Friday, employers and unions called for supports to be made available, with the Irish Congress of Trade Unions (Ictu) also calling for plans to reduce the VAT rate or cut income tax to be stalled.
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Ibec, the employer’s body, wrote to Taoiseach Micheál Martin calling for the introduction of extensive temporary schemes following high-level talks yesterday between unions, employers, the Government and exporters.
It warned that the impact of tariffs would hit Irish firms “almost instantly, and no time can be lost in putting appropriate supports in place”.
The group wants a new “targeted and timebound” short-time working scheme beyond existing social protection payments to keep employees connected to their employers and support their income levels – as well as a new export credit insurance scheme to help Irish firms access new markets.
It is also calling for the introduction of new health warnings on alcohol bottles to be suspended, which have previously been flagged as an issue for exporting brewers and distillers, and the reintroduction of a Covid-era Stabilisation and Recovery Fund, as well as increase in “investment aid”.
Ibec also wants the Government to introduce supports for businesses dealing with the cost of energy and water.
Meanwhile, Ictu wants a scheme which would allow workers to receive unemployment payments that would be linked to their former salaries.
It’s understood planning is under way for Tánaiste Simon Harris to travel to Washington to meet US Secretary of Commerce Howard Lutnik next week.
Asked about the potential for new schemes on Friday, Mr Harris said the Government “stands ready” to support businesses and workers, but added: “There isn’t any scheme the benefit of which would outweigh the progress that we could make in terms of getting to a better place with tariffs in the days and weeks ahead, and that’s what our focus as a government should rightly be on.”
Privately senior Government sources ruled out much of what Ibec is looking for, at least in the short term.
Meanwhile there is a growing expectation in Dublin that the EU is likely to hit back hard against the US when the bloc decides on its response to this week’s tariffs.
Ireland remains wary of an over-aggressive response, with Ministers fearful that such a course would lead to further retaliation by the US, compounding trade disruption and economic damage.
Sources in Dublin concede, however, that a tough response is becoming more likely.
Last night, the EU trade commissioner Maros Sefcovic held a two-hour telephone call with the US commerce secretary Howard Lutncik, which he described as “frank”. In a post afterwards, Mr Sefcovic said the EU was “committed to meaningful negotiations but also prepared to defend our interests”.
