Trump's tariffs could cost 25,000 Irish jobs and slow economic growth, report says
Taoiseach Micheál Martin has said that even if current issues and differences in approach to global trade are resolved, there will not be a return to the status quo.
Finance Minister Paschal Donohoe said "we are in a time of immense uncertainty" signalling that the scenario outlined by officials in his Department is not worst case as it does not take account of any tariffs that could be imposed on Ireland's critical pharmaceutical sector or the latest announcement around tariffs on the film industry.
Growth in the domestic Irish economy is expected to slow significantly by the end of 2026 based on a presumption that the 10% tariff regime imposed on the EU by the US president continues.
The analysis shows that modified domestic demand (MDD) - the preferred measure of the economy that strips out the activity of multinationals and airplane leasing companies - was expected to grow by 2.5% this year and 2.8% next year before the tariffs were implemented. This has now been downgraded to just 2% growth this year and by 1% next year.
Minister for for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation, Jack Chambers TD and Minister for Finance: Paschal Donohoe TD speaking at the announcement of the Exchequer Q1 Results at the Department of Finance. Picture: SAM BOAL/Collins Photos
This analysis is based on the US retaining its 10% baseline tariff on all imports into the country. However, this 10% rate is due to expire in July, at which point the EU tariff could go back up to 20%.
The analysis does not account for the tariff rate going higher than 10%, or specific tariffs on pharmaceuticals and semiconductors, or the potential for retaliatory tariffs by the EU on US imports. Any unforeseen changes in these areas could also impact domestic economic growth.
Speaking at the Global Ireland Summit, Mr Martin said the Trump administration has unleashed enormous uncertainty across the world with its approach to trade and said trade wars are a lose-lose situation.
"We do not believe that unilateral action is the way to resolve difference on trade; and we do not believe that tariffs solve problems. Dialogue solves problems," he said.
Recent events have underscored how vulnerable world markets are and while Ireland has benefitted from a more open and globalised world, it must now adjust to these uncertain times.
Speaking at the same event, Tánaiste Simon Harris said the Government strongly supports the approach being taken by the EU on US trade tariffs and emphasised the need for EU unity on the matter.
US President Donald Trump. Half of all company profit warnings last month flagged a hit from the mounting global trade war amid the fallout from Trump's sweeping tariff hikes, according to new figures. Picture: Niall Carson/PA Wire
In addition to supporting efforts at EU level, the Government is developing a detailed action plan for trade diversification. This will seek to identify new opportunities and alternative markets for Irish goods.
Mr Harris said there will be a sustained focus on driving competitiveness domestically in support of Irish businesses, investment in Ireland, and jobs.
It comes as the EU's chief negotiator said the bloc is under no pressure to accept an unfair tariff deal with the United States, adding that it was being contacted by other countries seeking to forge closer trade ties.
European Trade Commissioner Maros Sefcovic said: "We do not feel weak. We do not feel under undue pressure to accept a deal, which would not be fair for us."
But he told the EU Parliament that American tariffs now cover 70% of EU goods trade to the United States and that could rise to 97% after further US investigations into pharmaceuticals, semiconductors and other products.
Last night, Donald Trump told the new Canadian prime minister Mark Carney that there is nothing Mr Carney can say to him that would make him lift the tariffs on Canada. He also said China's economy is 'suffering greatly' because of his tariffs and that Beijing wants to negotiate a trade deal to end the tariffs. He added 'we will be meeting with them at the right time'.
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