Dáil Éireann Debate, Wednesday - 26 March 2025
58. Deputy Brendan Smith asked the Minister for Enterprise, Trade and Employment in view of the recent ESRI report on the adverse impact on the economy if tariffs were imposed by the United States, the measures being prepared to protect employment in sectors that are heavily dependent on export markets and the impact on the economy in general; and if he will make a statement on the matter. [14603/25]
Amharc ar fhreagraThe Government regrets the US Administration’s decision to impose tariffs on steel and aluminium from EU and other trade partners. It leaves the EU with no choice but to take the necessary and proportionate action to defend the interests of Irish and European businesses, workers and citizens.
The EU has announced its response to these tariffs, and work is ongoing regarding their implementation. The EU has now announced that it is currently planned that these will come into effect in mid-April. I welcome that the Commission has extended its implementation by this extra period to create additional negotiation space with the US.
I also welcome that the EU also made clear that it is open to fine-tuning its rebalancing measures so that they strike the right balance of products, taking into account the interests of EU producers, exporters, and consumers.
There remains a window of opportunity for negotiation between the EU and US to reach agreement on the suspension of tariffs. The EU stands ready to find a negotiated solution with the US. Its countermeasures can be reversed at any time if such a solution is found.
The Tánaiste chaired a meeting of the Government Trade Forum last Friday, which I also attended. This was an opportunity to update business stakeholders on the latest developments, including the Irish and EU response. The Forum also received a comprehensive presentation by the Minister for Finance, Paschal Donohoe, on a report just released by his department and the ESRI on the potential macroeconomic effects of tariffs on the Irish economy.
The analysis shows that Modified Domestic Demand – the most meaningful metric for the Irish economy – would be between 1-2 per cent below its no-tariff baseline level after five years, depending on the extent of bilateral tariffs. The potential impact on GDP is larger, estimated at around 2½ to almost 4 per cent below a no-tariff baseline. It must be stressed that this only measures the impact of tariffs – it does not take into account any impact on other variables such as FDI. The shock to MDD would be accompanied by lower-than-assumed employment growth, which is expected to be 2 to 3 per cent lower compared to a scenario where no tariffs are introduced.
As expected, given the open nature of the Irish economy, the results indicate that the traded sector is likely to be disproportionally impacted by tariffs. Exports are estimated to be 3 to 5 per cent below a no-tariff baseline. I have taken careful note of this report, which is yet another reminder that there are no winners when tariffs are applied.
Close coordination with the European Commission will be essential in the period ahead and we will continue to remain in close contact with all stakeholders and our EU partners as this develops. Every opportunity for negotiation must be used and Ireland will be strong advocates for an outcome which enhances the existing and strong transatlantic trading relationship.
