US president Donald Trump’s threatening 30 per cent tariffs on goods from the European Union would have a “very severe impact on the economy”, Taoiseach Micheál Martin has said.
However the Fianna Fáil leader said “if we can get back to a sensible [tariff] level or sensible discussions we should be able to avoid the worst”.
Mr Martin was speaking to reporters before a Cabinet meeting on Tuesday where Tánaiste and Minister for Foreign Affairs Simon Harris was expected to brief colleagues on the impact of such tariffs including the potential for job losses.
While the European Union will seek to use the time before Mr Trump’s August 1st deadline for the new tariffs to find a negotiated solution, though the European Commission is preparing its own set of tariffs if talks fail.
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[ A timeline of key tariff-related eventsOpens in new window ]
Mr Martin said the Government here is finalising discussions on the updated National Development Plan (NDP) and is working on budget preparations.
He said the goal of the NDP and the budget is “the transformation of Irish infrastructure over the next number of years, very significant investment particularly in energy and the grid, electricity, and of course in water, roads and public transport”.
But he said: “Of course the backdrop to that is the very troubling, difficult negotiations with the United States and the European Union in relation to tariffs and trade.”
Mr Martin said Minister of State Thomas Byrne had reported that EU trade commissioner Maros Sefcovic offered a “sobering presentation” on the state of play in the tariff negotiations at a meeting of the Foreign Affairs Council on Monday.
The Fianna Fáil leader said: “Obviously if there’s a breakdown in those [talks] or if tariffs at the scale being suggested by the US were ever to come to pass it would significantly alter our projections budgetary-wise for the next number of years.
“We hope that’s not the case. We hope negotiations will prevail and that sensible solutions will be found”.
Mr Harris, the Fine Gael leader separately said the country is “at a moment of major economic challenge” but also that this is being approached “from a position of strength” with full employment, rainy day funds and as part of the EU.
He said a trade deal with the US remains possible and said: “what we’re seeing from president Trump in many ways is an effort to negotiate and engage in public, to kind of try to apply maximum pressure from his perspective to other countries and to the European Union in terms of a trade deal with America.”
Mr Harris said: “if you arrived at a scenario where there are 30 per cent tariffs the impact of that is quite extraordinary.”
He said that while a 10 per cent tariff would see slower job growth here there would be job losses at 30 per cent.
Mr Harris spoke of the “challenge” in relation to potential tariffs on the pharmaceutical sector.
Last week Mr Trump said he is planning to announce tariffs on imported semiconductor and pharmaceuticals, saying the rate for medicines could reach 200 per cent but that he would give drug makers about one year “to get their act together”.
Mr Harris said he will be convening a meeting of US pharma companies tomorrow through Ireland’s embassy in Washington.
He said: “Were the US to decide to do something that is ill conceived or ill thought out on pharma I think that would have very significant consequences not just for Ireland but also for patients across the Atlantic and for global supply chains.”
