Irish businesses predict multibillion-euro loss in trade under Trump tariffs

New US tariffs on the EU will cover 25% of Ireland’s American exports and could result in multibillion-euro losses euro in trade in the short term, according to a major Irish business group.

Ireland falls under the sweeping 20% tariff imposed on most EU exports to the US which was announced by President Donald Trump on Wednesday and will come into effect in the coming days.

Ibec’s first assessment of current measures projects a loss of between four and six billion euro in trade in the short term.

It also said the measure, which is a 5 percentage point rise on existing tariffs with a cash equivalent of 3.6 billion euro, marks “the beginning of a change in the trade environment for Ireland and not the end”.

The group said said uncertainty will be the biggest short-term barrier to trade growth.

Ibec said all evidence points towards an immediate impact on trade, particularly for sales of goods which are substitutable by domestic US products.

However, it said the US will have difficulties substituting certain goods in the short term given the widespread nature of the tariffs.

Ibec called for Government support for workers and enterprise as well as investment in schemes to help companies increase productivity and access new markets.

It predicted that companies will not make rash decisions given the uncertainty around the duration of the measures, but added that a negotiated solution is critical to lessen the impact on long-term trade.

Senior figures in Ireland’s Government have expressed hope for a negotiated settlement as the Irish premier warned of the potential for global “recessionary trends”.

Taoiseach Micheal Martin said he is concerned about the impact on investments and jobs in Ireland, the EU and across the world, saying investors will keep their head “below the parapet” until the fallout over tariffs settles down.

He said he deeply regrets Mr Trump’s decision, adding there was “no justification” for the tariffs.

He also disputed how the US calculated the 20% rate, which Washington said was determined by looking at tariffs and other trade barriers imposed on the US by the EU.

Mr Martin said the figures “do not reflect the reality of the situation as we see it”.

He said Ireland and the EU will “weather this storm”, but added the tariffs will have an adverse impact.

The impact was likened to the Great Depression by Ireland’s Public Expenditure Minister Jack Chambers.

He said: “The last time the scope or extent that this was tried globally in trading terms was… around 1930, which led to the Great Depression. In fact, the tariffs that are being imposed now are in excess of that.”

Mr Martin was among senior Irish Government figures to suggest the tariffs were an opening bid for negotiations.

He said: “The feedback so far from the US is, our sense is, that negotiations is the preferred route forward.

“The next 48 hours will tell a lot.

“What I get from the president’s speech is very much sort of wanting to engage, and signalling a desire to engage, to negotiate a sensible settlement here.”

He also said the EU and Ireland will “not be shy” in advocating for their interests as part of negotiations.

“No country is going to be shy and Ireland will not be shy in saying, in terms of our interests, but also strategy,” he said.

“I think the strategy is the key issue here, in terms of designing counter-measures that would have the desired impact of bringing people to the table and enabling negotiations.”

US commerce secretary Howard Lutnick, a vocal critic of Ireland, said Mr Trump “is not going to back off” on the tariffs, which he described as a reordering of global trade.

Mr Lutnick told CNN the US president would only make a new deal with affected countries if they “change everything about themselves”, in a reference to tariffs and “non-tariff trade barriers” – in particular VAT.

Ireland’s European Commissioner Michael McGrath, who also attended a press conference in Dublin alongside Mr Martin, said the EU is ready to negotiate with the US.

“The current provisional estimate is that overall, around 380 billion euro of EU exports will be subject to the additional tariffs, that comprises of approximately 290 billion subject to the so-called reciprocal tariffs, 26 billion subject to tariffs on steel and aluminium, and 67 billion euro subject to US tariffs on cars and car parts.

“This would represent, overall, around 70% of all EU exports to the US being subject to new tariffs that have been announced yesterday and indeed in recent days, which would result in around 80 billion euro in additional duties on EU exports to the United States.”

He said the EU is preparing for further counter-measures to protect Irish and EU interests and businesses if negotiations fail.

The Irish deputy premier said there is a need for “maturity” in negotiations with the US.

Speaking to reporters in Dublin on Thursday, Mr Harris said he took a “grain of hope” from Mr Trump’s stated willingness to engage with other countries.

“It’s absolutely clear President Trump wanted this big moment last night. He got it – big charts and all – that happened in the Rose Garden, that bit is done.

“What we now need is the maturity of actually sitting down in a room and finding a way forward that’s good for the US economy, good for the EU economy, and that then ultimately is good for Ireland.”

Mr Harris said he was seeking a “negotiated way forward” but the EU “has to respond if the US refuses to engage”.

He said the bloc cannot “stand idly by”, and added: “We don’t want to be involved in tit for tat. We’d much rather be involved in talks.”

On Wednesday, Mr Trump announced a minimum baseline tariff of 10% on all imports from all countries, with additional higher rates for some regions – including 20% on Ireland and the rest of the EU.

The 10% rate is effective from April 5 while the “individualised reciprocal higher” rates will be implemented from April 9.

Pharmaceuticals, which account for a significant chunk of Irish exports, are currently exempt from measures, but Mr Trump has previously threatened tariffs on the sector and may yet make further orders. Mr Martin suggested the exemption may be down to the US underestimating the complications and impacts of taxing the sector.

During Wednesday’s announcement, Mr Trump said his administration was being “very kind” by implementing tariffs for most trading partners that were essentially half the rate of measures it had calculated were imposed on the US.

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

He said: “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.”

The comments suggest the US administration considers a “full reciprocal” tariff rate for the EU would be 39%.

Mr Martin disputed this, saying: “I think it was inevitable that some figures were going to be produced last evening to justify the position of tariffs.”

He said Irish companies should be encouraged to break into new markets and negotiate new trade deals between Europe and other big economic actors including India and Indonesia.