Ireland Warns Thousands of Jobs at Risk From Pharma Tariffs

Yahoo

5 hours ago

(Bloomberg) -- Ireland plans to use its budget cushion to pump money into infrastructure to protect competitiveness as global trade turmoil and tariffs threaten thousands of jobs in the multinational hub.
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The small, open economy has a strong fiscal position for now, with a huge budget surplus thanks to corporate tax income from US corporates such as Apple Inc. and Pfizer Inc. But with some of that revenue at risk, Finance Minister Paschal Donohoe said Monday that the government must use that money with an eye on the longer term.
'One of my deep lessons from the aftermath of the global financial crisis is, when capital investment is decreased, the costs mount up in the future,' he said at Bloomberg's Future of Finance in Ireland event in Dublin. 'If our growth outlook does change, we will use our fiscal position to try to maintain and support capital investment and do all we can to avoid cutting it back again.'
The rapidly changing global backdrop is also raising concern for employment. Pharmaceutical tariffs, if imposed by President Donald Trump, are a key worry, with Donohoe warning they could cost the economy 75,000 jobs.
While Donohoe said Ireland remains an attractive destination for investment, both the government and the country's central bank have had to acknowledge the threats. Both recently cut their growth forecasts, citing Ireland's large exposure to US President Donald Trump's volatile trade policies.
The US administration has repeatedly singled out the Irish model, with Commerce Secretary Howard Lutnick saying Ireland runs a surplus at America's expense. Trump even raised the matter with Irish Prime Minister Micheal Martin at a St Patrick's Day White House reception.
While Trump's policies have raised new threats for Ireland and Europe, governments are also sensing an opportunity to take advantage and boost competitiveness. Germany is increasing spending, providing a fiscal boost for the region's largest economy, while central bankers and politicians on the continent are talking up the euro's global profile as US policies shake dollar confidence.
'Political events in the US have catalyzed something in Europe and have changed things,' said John O'Toole, global head of multi asset solutions at Amundi. 'Europe is now on a path to reasserting itself and standing on its own two feet.'
Real progress is going to require Europe to do a lot more on issues like improving its capital markets and pools of liquidity. And, according to AIB Group Plc Chief Executive Officer Colin Hunt, Europe's Savings and Investments Union has gained momentum thanks to the 'Make America Great Again' movement in the US.
'We are entering a phase of potentially a lot of investment into the European economy, whether it's the German fiscal spending and maybe other countries will follow,' said Polina Hristova, head of Algebris Investments Ireland. 'We need to be more competitive, we need to invest in innovation, we need to be more resilient. There is definitely the impetus now.'
--With assistance from Jennifer Duggan.
(Updates with comments on Europe starting in eighth paragraph)
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