‘No justification’ for US tariffs, Irish premier says

There is “no justification” for US tariffs on the EU which will impact Ireland, Irish premier Micheal Martin has said.

On Wednesday night, US president Donald Trump announced a 20% tariff on the European Union as part of a slate of international measures on what he deemed “liberation day”.

There had been significant concern and anxiety in Ireland in the run-up to the announcement, with the US administration’s protectionist approach to tariffs and tax posing a significant risk to the country’s economy that is in large part sustained by long-standing investment by US multinationals.

Mr Trump said there would also be a minimum baseline tariff of 10%, which was the same rate implemented on the UK.

The 10% rate is effective from April 5, and the higher rates are implemented from April 9.

The White House said: “These tariffs will remain in effect until such a time as President Trump determines that the threat posed by the trade deficit and underlying nonreciprocal treatment is satisfied, resolved, or mitigated.”

Significant concerns have been raised for specific sectors in Ireland, including the pharmaceutical and spirits industries.

However, a fact sheet from the White House said that pharmaceuticals are not currently subject to the reciprocal tariff, but adds that future good-specific or sector-specific tariffs may be announced.

Prior to the announcement, Irish deputy premier Simon Harris previously warned that the export of pharmaceutical products from Ireland to the US could halve if the EU applies the same 20% tariff on the US.

Around 45,000 people are employed in Ireland’s pharmaceutical companies, while some 58 billion euro in pharma and chemicals is exported from Ireland to the US every year.

Meanwhile, the country’s Finance Minister Paschal Donohoe previously said Ireland is facing a possible slump in employment growth, a decline in tax revenue, possible income tax increases, and a cut on the projected levels of jobs by up to 80,000 in the next five years.

On Wednesday, the US president said he was implementing the taxes after other countries had prospered at America’s expense.

During his announcement, Mr Trump said the administration had calculated the “combined rate” of all tariffs, non-monetary barriers, currency manipulation and “other forms of cheating” implemented by other countries and the EU.

In return, he said the US was taking a “very kind” approach by generally implementing “approximately half of what they are charging us”.

Ireland was not specifically mentioned in the address, but Mr Trump emphasised his response to the EU.

He said: “You think of the European Union, very friendly. They rip us off, it is so sad to see – it is so pathetic.

“They charge us 39%, we’re going to charge 20% – so we’re charging them essentially half.”

He said the tariffs were “kind reciprocal” measures and outlined a vision of increased domestic production and competition, adding that the administration would “pry open foreign markets and break down foreign trade barriers”.

The comments raised the prospect of a “full reciprocal” tariff rate of 39% for the EU.

Mr Trump met the Taoiseach last month for St Patrick’s Day events and said he did not want “to do anything to hurt Ireland”, but added that the trade relationship between the countries should be focused on “fairness”.

Reacting to the tariffs announcement, Mr Martin said: “I deeply regret the US decision to impose 20% tariffs on imports from across the European Union. We see no justification for this.”

Mr Martin said the Irish Government will “now reflect with” EU partners on how best to proceed.

He added: “Any action should be proportionate, aimed at defending the interests of our businesses, workers and citizens.

“Now is a time for dialogue, and I believe that a negotiated way forward is the only sensible one. A confrontation is in no one’s interests. Ireland will be a strong advocate for an outcome which enhances the existing and strong transatlantic trading relationship.”

Mr Martin said the Government was prioritising protecting jobs and the economy.

“By working with Irish-owned companies, multinationals, our EU partners and bilaterally with the US, we can and will weather this storm.”

Mr Harris said the tariffs represent a “huge challenge”.

He added: “I must be honest tonight that a 20% blanket tariff on goods from all EU countries could have a significant effect on Irish investment and the wider economy and the impact of what has been announced is likely to be felt for some time.

“It represents a huge challenge to Irish exporters to the US across all sectors. Work is already under way to mitigate this and we are already taking concrete steps to boost our domestic competitiveness and investing in our infrastructure.”

The Irish Whiskey Association said the tariffs could bring “devastating impacts” to the spirits sector.

The US represents 41% of Irish drink exports every year, with the total value of the market calculated at 865 million euro annually.

In a statement, it highlighted a 450% growth in the combined US and EU spirits sector under a tariff-free regime between 1997 and 2018.

It said: “Our high-quality jobs cannot be reshored or repatriated to the US. Our sectors are truly interconnected.

“There are many examples of EU and US distillers working together in developing portfolios, operating facilities, creating additional jobs and new investments in both jurisdictions.”

It added: “The EU and US spirits sector is the best-in-class model for reciprocal, zero-for-zero tariff trade.”

The representative body said the the industry has surmounted challenges in the past and will continue to engage with the Irish Government and the EU to secure supports.

It said: “We encourage both the EU and US to work together in good faith in seeking an agreement which will avoid tariffs and the devastating impact they may have.”

It added: “We hope that this spirit of cooperation, collaboration and conviviality can help contribute to an eventual resolution to trade disputes.”

Mr Trump advised companies who did not want tariffs implemented on their goods, to “build your product right here in America”.

He predicted he would receive calls from foreign leaders looking for exemptions, and advised that they should terminate their own tariffs and start buying “tens of millions of dollars” of US goods.