Ireland’s public finances remain in “good condition”, according to the Minister for Finance, who expressed confidence that the country can manage the threat of US-imposed tariffs, reports RTE.
Paschal Donohoe, however, warned that the current situation could “regrettably” have a “significant effect” on both economic growth and employment, though negotiations are currently ongoing at the EU level in an effort to prevent this outcome.
US President Donald Trump has announced the potential introduction of a 30% tariff on goods imported from the EU starting 1 August, reports RTE.
He also suggested that a trade deal could still be reached between the EU and the US.
“(The) European Union has been brutal, and now they’re being very nice. They want to make a deal, and it’ll be a lot different than the deal that we’ve had for years,” Mr Trump said.
The EU’s trade commissioner, Maroš Šefčovič, is travelling to Washington to discuss the potential tariffs, reports RTE.
Speaking on RTÉ’s Morning Ireland programme, Mr Donohoe acknowledged the difficulties ahead, but added: “I am confident that with the decisions we’ve made, the hard work of the people of Ireland and further choices we can make, we will rise to this moment and get our way through it.”
He noted that while a 10% tariff scenario has already been examined, models for a 30% rate are also being prepared, stressing that it is “not as straightforward as saying there would be a simple extrapolation forward” of the figures already quoted, reports RTE.
Nonetheless, he emphasised the need to be realistic about the fact that higher tariffs would bring greater damage to employment and job creation.
“This is a big challenge, we need to have a moment of recognition of that, but we have faced challenges before and we will get through this one too,” he said, r r
Mr Donohoe said it would be necessary to reduce the current rate of spending growth, pointing out that recent spending increases of 8% to 9% took place when inflation was running at between 5% and 10%.
He added that although the cost of living remains “still so hard for so many”, inflation has now slowed to “around 2%, not 5 or 10%”, reports RTE.
The Minister noted that IDA Ireland delivered a “really strong” performance in the first half of this year, and overall levels of investment and job creation remain “very positive”.
However, he observed that in his discussions with major employers and investors in Ireland, many are now “pausing” their decisions.
“That’s not the same thing as saying decisions won’t be made or they can’t go in our favour in the time ahead,” he added, reports RTE.
“But understandably, with the level of economic uncertainty that is there, employers are taking care regarding decisions they make, which is why an atmosphere of certainty here in Ireland, economic policy and investing is the best way to try to mitigate the uncertainty that others feel.”
According to Mr Donohoe, even without factoring in the impact of potential 30% tariffs, the economic forecast still indicates strong employment growth. He said the number of jobs is expected to continue increasing, although at a slower rate than before, reports RTE.
“But we have a challenge, because of trade uncertainty, which is why negotiation, which Simon Harris and Micheál Martin are doing, and investment and competitiveness, is the best response back,” he added, reports RTE.
In efforts to push for improved trade terms and address the large US trade deficit, the Trump administration has been negotiating trade agreements ahead of the 1 August deadline, when tariffs on most imports into the US are expected to rise.
When asked about the possibility of reaching a deal with Canada—which, like the EU, is preparing retaliatory measures in case talks with the US collapse—Mr Trump responded: “Too soon to say,” reports RTE.
His response aligned with the view of Canadian Prime Minister Mark Carney, who earlier said a deal that benefits Canadian workers is not currently under discussion.
Mr Trump also stated that he would likely impose a general 10% or 15% tariff on smaller countries, reports RTE.
Tell us your thoughts in the Facebook post and share this with your friends.
