The Daily Star Ireland
The prospect of the United States imposing additional tariffs on European Union (EU) imports looms large, with significant potential repercussions for Ireland’s economy. These measures, set to take effect on April 2, 2025, could profoundly impact various sectors, notably pharmaceuticals and manufacturing.
Ireland’s economic landscape is intricately linked to its export activities, particularly with the U.S. In 2024, the nation exported goods worth €72.6 billion to the U.S., with pharmaceuticals accounting for €58 billion of this total. This heavy reliance underscores the vulnerability of Ireland’s economy to external trade policies. The Irish Exporters Association has expressed concerns regarding the potential tariffs, emphasizing the need for companies to brace for possible disruptions.
Analyses by institutions such as the Economic and Social Research Institute (ESRI) and the Department of Finance paint a concerning picture. Projections suggest that the domestic economy could contract by 2% over the next five to seven years if the U.S. implements a 25% tariff on EU exports. This scenario could result in a €17 billion decrease in GDP, with multinational companies potentially considering relocation, thereby affecting employment and tax revenues.
Irish officials are actively engaging with EU counterparts and the U.S. administration to navigate the looming trade tensions. Tánaiste and Minister for Foreign Affairs and Trade, Simon Harris, has acknowledged the high likelihood of significant disruptions stemming from the anticipated U.S. tariffs. He advocates for a unified and firm response from the EU, emphasizing the importance of negotiations to mitigate adverse outcomes. Finance Minister Paschal Donohoe has also highlighted the unprecedented uncertainty in global trade, stressing the necessity for contingency planning to safeguard Ireland’s economic interests.
In retaliation to the U.S. tariffs, the EU has announced plans to impose its own set of tariffs on U.S. goods, affecting exports valued up to €26 billion. These countermeasures are scheduled to be introduced in two phases, commencing on April 1 and fully implemented by April 13, 2025. The targeted U.S. goods will face 25% customs duties, impacting industries such as steel, aluminum, and textiles.
The impending U.S. tariffs present a formidable challenge to Ireland’s economy, given its substantial export ties with the U.S. The government’s proactive engagement with EU partners and the U.S. aims to mitigate potential disruptions. However, businesses and policymakers must prepare for a period of economic uncertainty, strategizing to uphold Ireland’s economic resilience in the face of evolving global trade dynamics.
