The Taoiseach has said there is an unfounded hostility toward the European Union within the US administration, reports RTE.
Speaking ahead of the quarterly Labour Employer Economic Forum (LEEF), Micheál Martin cautioned that the EU’s response to new US tariffs should avoid escalating tensions further.
“There is an issue there, without doubt. Within the US administration there is an antipathy that’s not disguised towards the European Union. Misplaced, in my view, because if you take the European Union as a bloc, the trading relationship between it and the US is the biggest in the world. It has helped raise prosperity, reports RTE.
“Many of the big US pharma and technology companies have done well out of the European market. I mean, that seems to be forgotten by the US administration, and has done very well,” reports RTE.
Mr Martin argued that President Donald Trump’s focus on the trade imbalance between the US and the EU overlooks a key aspect of the transatlantic economic relationship.
“President Trump and the administration have very carefully just put services to one side,” he added.
“But services is the growth engine of modern economies, and the US enjoys a much, much better relationship on the services side with Europe, and indeed with Ireland, than it does on the goods side. But that gets ignored,” reports RTE.
He noted that any EU response must balance the interests of its member states, while also aiming to find common ground with the US.
Mr Martin remarked that the era of global free trade appears to be ending, warning that a return to protectionism would be harmful in the long term, reports RTE.
Regarding a shift in Ireland’s economic approach to focus more on domestic companies, he said: “It’s not either or. The old order is changing, it may change again. We have to work better, parallel with that, on how we scale up Irish companies.”
The Taoiseach also said “it’s far too early to be specific” on whether trade uncertainty will delay commitments outlined in the Programme for Government, reports RTE.
Also speaking at the LEEF, Minister for Public Expenditure and Reform Jack Chambers expressed concern over any extreme retaliation from the EU in response to US tariffs.
He said: “We want to move this to a space in negotiation”, adding that he thinks the calm, measured strategic response from European Commission President Ursula von der Leyen is welcome, reports RTE.
“Excessive additional retaliatory measures that make this worse are a concern for Ireland.
“But we know if the US isn’t willing to come to the table and they aren’t willing to negotiate that some countermeasures are going to be required from the European Union, reports RTE.
“But we are reflecting our position as are many other countries,” the minister added.
Mr Chambers stressed the need for EU unity in response to the US tariff measures, reports RTE.
Earlier, the Taoiseach warned that the US tariffs will have a lasting impact on the global economy and could drive inflation higher.
On Wednesday, US President Donald Trump revealed a 20% tariff on goods from the EU, citing it as a proportional response to the EU’s tariffs on US products, reports RTE.
He also proposed a 10% minimum tariff on all imports entering the United States.
While the EU is eager to begin negotiations, Mr Martin said countermeasures are still being prepared in case diplomacy fails.
Speaking on RTÉ’s Morning Ireland, the Taoiseach said: “What is not sustainable is the current situation. Economically it will hurt American consumers, it will hurt American businesses, it will hurt the world economy, reports RTE.
“The pain won’t be short-term because this is a significant inflationary hit by any yardstick, and in my view, is not tenable or sustainable,” reports RTE.
He added: “The European Union wants to engage in negotiation, the President of the Commission [Ursula von der Leyen] has said that to me last week, but the European Union is designing countermeasures if negotiations don’t succeed or are not concluded in a satisfactory manner,” reports RTE.
Mr Martin said that if diplomacy fails, retaliatory action would become inevitable, although such a move would be harmful to all parties.
There is a worrying antipathy towards the EU by the US, the Taoiseach added, reports RTE.
“We are in a very, very unchartered situation, it’s uncertain and that’s bad for the world economy,” he said, reports RTE.
“My biggest concern right now is sentiment is going to go down, investment decisions are being paused, Ireland is a small open economy, we want growth in the world economy – that will impact us quite significantly as well, not just the tariffs,” reports RTE.
He noted that discussions are underway between the pharmaceutical industry and US authorities regarding supply chains and medicine costs, highlighting the complexities involved.
“In terms of the supply chain, in terms of costs of medicines to US citizens, it’s not simple,” he said, reports RTE.
Mr Martin also pointed to potential labour shortages in the US as a major obstacle to its plans to bring manufacturing back onshore.
“There’s a huge shortage in the US in terms of human capital and people to actually do the job, so the idea of re-shoring pharmaceutical immediately doesn’t seem practical or feasible, and the same with semiconductors,” reports RTE.
He added that multinational companies operating in Ireland have reiterated their long-term commitment to the country.
Several meetings at Government Buildings today will focus on how Ireland can mitigate the effects of the new tariffs and prepare for further potential measures, reports RTE.
Employers, unions, state agencies and ministers are taking part in discussions through the Labour Employer Economic Forum (LEEF) and the Government’s Trade Forum.
The LEEF, chaired by Mr Martin, usually focuses on employment and economic issues but will today prioritise the implications of the US tariffs, reports RTE.
Mr Martin will chair the session, which includes Tánaiste Simon Harris, Finance Minister Pascal Donohoe, and Public Expenditure Minister Jack Chambers, as well as other officials and ministers.
Later, the Government’s Trade Forum, set up in February by the Tánaiste, will also meet to assess the US tariffs and the risk of further sector-specific duties.
The Trade Forum, chaired by Mr Harris, will discuss potential consequences for Ireland’s pharmaceutical exports if new US measures are introduced, reports RTE.
Mr Harris is also expected to update the Forum on Monday’s meeting of EU Trade Ministers in Luxembourg and confirm that Enterprise Minister Peter Burke will present a competitiveness strategy to Cabinet next Thursday.
The Tánaiste will also outline a plan for the Departments of Foreign Affairs and Enterprise to develop a six-week action strategy aimed at managing the economic uncertainty and exploring alternative markets for Irish goods.
Mr Harris is set to acknowledge that the 10% tariff applied to Northern Ireland, compared to the 20% levied on the Republic, presents a near-term issue. However, internal analysis indicates that if Ireland were outside the EU, the rate might have been closer to 35%, reports RTE.
Tell us your thoughts in the Facebook post and share this with your friends.
