Business orders from US already slowing or drying up, says Taoiseach

By Gráinne Ní Aodha and Cillian Sherlock, PA

Some businesses have already seen orders from the US “slowing or drying up entirely”, the Taoiseach has said.

Taoiseach Micheál Martin warned that the 20 per cent tariff imposed on most EU goods would negatively affect the Irish economy and put jobs at risk.

He said despite the challenges, the Government should not be “deflected” from investing in infrastructure and people.

He was speaking during a dedicated time in the Dáil to hear statements on US tariffs, during which TDs said it would be ordinary people that would pay the price for new tariffs.

Sinn Féin asked that special attention be paid to the two separate tariffs on the island of Ireland – 20 per cent in the Republic and 10 per cent in Northern Ireland.

The Dáil statements took place while Tánaiste Simon Harris met in Washington DC with US commerce secretary Howard Lutnick, a key critic of the Irish Government’s fiscal policies.

Major worldwide tariffs announced by US president Donald Trump last week also came into effect on Wednesday, imposing a 20 per cent import tax on EU goods worth €380 billion.

This follows previously announced US tariffs of 25 per cent on steel, aluminium and on automobiles.

Mr Martin said that businesses in Ireland have already been affected by the 20 per cent tariff imposed by the US on EU goods.

He added: “There is no way to sugar coat it. A 20% blanket tariff on most goods could potentially have a very significant and negative impact on investment and on the wider Irish economy, will represent a huge challenge to Irish exporters to the United States across all sectors.

“We are already hearing from some who are seeing orders from the United States slowing or even drying up entirely, putting valuable and skilled jobs at risk, and there may be more to come.”

He said that he had met with representatives of pharmaceutical and med-tech sectors, who expressed concern about import taxes on pharma goods threatened by Mr Trump.

He added: “I hope that, having reflected, the United States will step back from disrupting this most sensitive sector. I am sure that we can find a negotiated solution in which we can get a reasonable settlement.”

Mr Martin said the EU response to the tariffs to date was “the correct one”, and he was satisfied that the concerns of Ireland had been “taken fully into account”.

The Taoiseach also said he shares “serious concerns” about how any EU counter measures would affect Northern Ireland.

“We are working through these issues, and we will continue to be in close contact with the Northern Ireland Executive,” he said.

“There may be specific issues for the agri-food sector, not least due to the integrated supply chains north and south in this industry and the customs rules of origin, which define the origin of a product for tariff purposes.

“We understand that supply chains on this island are deeply connected, and that any change to current integrated arrangements will require huge investment.”

Sinn Féin leader Mary Lou McDonald said that Ireland was uniquely exposed to “unprecedented” blanket tariffs, which she called “an unjustified act of economic aggression”.

She also warned against the EU taking counter measures, arguing that “cool and calm heads” were needed.

“It’s workers and families who carry the can in the form of increased prices, threats to jobs and livelihoods and hits to their incomes,” she said.

“A tit-for-tat battle is a race to the bottom, and that’s a race that nobody can win.”

She said that the Government should work “hand in glove” with the Northern Ireland Executive.

She added: “It’s a serious issue that we now have two different tariff rates on this small island of ours, and potentially two very different responses to those rates and the dynamic that is now unfolding around us.

“I’m asking those in government here to work hand in glove and in lockstep with their counterparts in the Executive.”

Sinn Féin finance spokesperson Pearse Doherty asked for the all-island economy to be prioritised and for a sectoral assessment to be done to decide whether targeted measures are needed.

He also said: “Tariffs can’t be used as an excuse to drop election promises. We need to strengthen our workforce by providing affordable childcare. We need to give people security by building the homes workers can afford.”

Labour’s Duncan Smith said that tariffs have “never worked” and are being used “in a weaponised capacity to hurt countries”.

He repeated Labour’s call to introduce a German-inspired Kurzarbeit subsidy scheme to help keep workers in employment while companies adjust their supply chains.

“This could be a vital move to hold on to our economic competitiveness for when this storm passes,” he said.

Minister for Finance Paschal Donohoe said the trade disruptions bring a “major challenge for global economy” which casts a “dark shadow over prospects” for the Irish economy.

He said the priority was to “deescalate” the situation but this was not something the Government or the EU could “fully control”.

He added: “Despite the storm clouds that are clearly gathering, I want to emphasise to the House that we are approaching the current challenge from a position of strength, and we will use this to our advantage in the weeks, months and years that await.

“We have weathered many storms now, in recent years we have done this by working with our partners in the European Union, by managing our public finances in a sensible way, by creating a pro enterprise economy, and by keeping our economy and our society open to trade.

“In a very changing world, I’m convinced these elements will continue.”