Main Points:
- Ireland should be wary of breathing any “sigh of relief” that pharmaceuticals exports were not hit by Trump’s across-the-board tariffs, a senior European Commission official has said
- Ireland will “not be shy” when it comes to its interests and the strategy being devised by the EU in response to the tariff announcement, according to Taoiseach Micheál Martin
- Last night Trump announced a 20 per cent tariff on imports into the US from the European Union
- Northern Ireland once again finds itself on the economic front line thanks to the difference in tariffs applied on either side of the Border.
- Ursula von der Leyen said it was major blow to the world economy and the EU was prepared to respond with countermeasures if talks failed.
- Minister for Finance Paschal Donohoe has warned businesses that there are limits to what the Government can do to support them
Key reads
Trump’s ‘complete nonsense’ tariff puts the ball in EU’s court
US stocks have suffered steep falls with the top index tanking to a six-month low shortly after opening, as Donald Trump’s tariffs reverberated through the world’s financial markets.
The S&P 500 plummeted about 4% to 5,440 shortly after markets opened in Wall Street – hitting the lowest level since September.
The Dow Jones tumbled around 3.6%, while the technology-focused Nasdaq index plunged nearly 5%.
Mr Trump’s plans for sweeping import levies on countries around the world has sent shockwaves through global markets.
The president said his plans will bolster production in the US and support home-grown goods, but economists have said the short-term impact will be higher prices and slower growth across the economy.
European and UK markets have also been seeing sharp drops in the aftermath of the speech in the White House last night.
The Dax is Germany was down by about 2.8%, and the Cac 40 had plunged 3.3% by late afternoon.
In the UK, the FTSE 100 was falling around 1.5% to a three-month low of 8,476.
The US dollar continued to drop sharply against key currencies on Thursday. It had slumped 2.5% against the euro, at around 0.9, in the afternoon, to hit a six-month low.
It was also tumbling around 1.2% against the pound, at 0.76. – PA
Two senior lawmakers on the US Senate Finance Committee are introducing legislation seeking to rein in Donald Trump’s ability to impose tariffs and would require congressional approval for new levies within 60 days.
Republican Senator Chuck Grassley and Democrat Maria Cantwell — who both serve on the Finance Committee — would require Trump to notify Congress on new tariffs with an explanation of the rationale including an analysis of the potential impact on American businesses and consumers.
Within 60 days, Congress would need to pass a joint resolution of approval on the new tariff, otherwise all new tariffs on imports expire.
The bill is modeled on the War Powers Resolution of 1973, and would reestablish limits on the president’s ability to impose unilateral tariffs without approval from Congress. – Reuters
French President Emmanuel Macron said on Thursday that tariffs announced by President Donald Trump were “brutal and unfounded” and a shock for international trade, and that Europe must respond “industry by industry”.
Speaking during a meeting with French industry representatives, Macron added that the response to the reciprocal tariffs would be “more massive” than its earlier retaliation to U.S. steel and aluminium tariffs. – Reuters
Volvo Cars’ new top executive said on Thursday the company would produce more cars in the United States while ramping up its regionalisation efforts, just as a 25% U.S. tariff on global autos takes effect.
European companies are scrambling to find solutions as President Donald Trump’s 25% duties on foreign cars became effective and a bigger-than-expected wall of import tariffs was unveiled on Wednesday.
Volvo Cars, which made an unexpected decision on Sunday to replace its CEO and return former chief executive Hakan Samuelsson to the helm of the company, has struggled lately, with its share price falling to record lows amid a slowdown in EV demand and global uncertainty.
As the company held its AGM in Gothenburg on Thursday, investors were eager to hear what Samuelsson, who led the company for over 10 years until 2021, would say about plans to revive the shares and improve the company.
“The share price has not developed as you shareholders have expected……This is an indicator that our shareholders are not fully invested in Volvo Cars,” Samuelsson said, adding it would be his job to win that faith back in the company.
He said he would look at ways to cut costs and improve strategy, which would include ramping up its regionalisation efforts with hubs in China, the U.S and Europe.
“We are well prepared in China and in Europe. But we need to be better in the U.S. to get around the import tariffs,” Samuelsson said, adding he expected to ramp up production at its Charleston plant in South Carolina. – Reuters
With the threat of US tariffs on pharmaceutical products still on the table, Taoiseach Micheál Martin has said Ireland will maintain its engagement with the Trump administration, the companies involved and the European Commission on the matter.
Cormac McQuinn reports:
The pharmaceutical sector is a major employer in Ireland as well as a significant contributor to corporation tax receipts.
US President Donald Trump has spoken of his wish to bring pharma jobs back to the United States.
Mr Martin said a “key objective” has been “to convey the complexity of the pharmaceutical story” and how Ireland is part of an “integrated supply chain.”
He said Ireland manufactures a range of goods that are exported to the EU, Asia and the United States.
“Pharmaceutical goods exported to the US are very often intermediate products that are essential for the finishing of products and the completion of products in the US.”
He said tariffs “could actually increase medicine prices in the United States, which I’m sure the US administration don’t want to do.”
Mr Martin also said the level of investment by companies in physical infrastructure in Ireland is “very significant” and “not easily relocatable overnight”.
He said there is a “a very significant skill-set” in Ireland “that enables the production of pharmaceuticals to a very high spec and standard” and that “strengthens the US companies, add value to them.”
He added: “There’s a real danger of undermining your own companies, the US companies, by proceeding precipitously or in a premature way”.
Mr Martin said: “we’re anxious to engage to find solutions that are beneficial to both.”
He said there is a similar situation with the manufacture of semiconductors and he spoke of the need to relocate chip manufacturing to Europe and the US from Asia.
“There’s plenty of room and capacity for semiconductor manufacturing to happen in Europe and across the United States.
“And then the capacity of any one economy to absorb all of that manufacturing capability is questionable as well because it needs human capital.
“It needs people at certain skill levels and that cannot happen overnight.
“It can’t happen in a year or two. So these are all I suspect and surmise factors in the decision-making process within the United States itself.”
One of the next big calls for the Government is what it says to Europe about hitting back in the face of US tariffs, Jack Horgan-Jones writes.
Dublin is clearly wary of an ever-escalating exchange, but Brussels is keen to show it won’t be pushed around.
In a rare show of political unity, Opposition parties seem to be, more or less, singing off the same hymn sheet.
Pearse Doherty, Sinn Féin finance spokesman
Mr Doherty told RTÉ’s Prime Time on Wednesday night that if there are counter-tariffs from the EU, it means that Irish consumers will pay higher prices and more jobs will be lost or not be created. “We should only ever countenance counter tariffs if we believe it’s going to take Trump to the negotiating table and that it will lead to de-escalation.”
If we believe what Trump is doing to be an act of self harm, then we shouldn’t rush in to do the same thing from a European point of view.”
Ged Nash, Labour Party finance spokesman
In a statement released on Wednesday night, Mr Nash said the EU’s power and agency “Must be used wisely”
“There is an enormous responsibility on the government and the EU to fully digest what’s been announced, and be strategic in how we respond with a ‘negotiations-first’ approach needed.”
Cian O’Callaghan, acting leader, Social Democrats
The Dublin Bay North TD urged that thereby “no knee jerk reaction from the EU to Trump’s tariffs and that cool heads prevail.”
Any escalation could risk Ireland’s pharma and tech sectors being dragged into a cross-Atlantic trade war – with devastating economic consequences.”
Roderic O’Gorman, Green Party leader
Mr O’Gorman’s statement was slightly more hard-edged about the prospect of Europe taking the Americans on, gurgling Ireland to work within the EU and with other like-minded countries. “Our strength lies in the fact that we are part of a powerful trading partner for the United States, which can respond with impactful economic measures if necessary,” he said.
Peadar Tóibín, Aontú leader
The Meath West TD urged direct negotiations between Ireland and the US in an effort to de-escalate, rather than the government toeing the EU line.
“It is really key that the Irish government do not take a back seat to the EU in our negotiations with the US. Ireland needs to negotiate with the US administration. It is vital that the Irish government be a force for de-escalation in this crisis. If the EU ratchets up retaliation this will hit Ireland the hardest.”
On Thursday, Bloomberg reported that France is pushing for the European Union to hit US tech companies in response to Mr Trump’s tariffs, in a move that would broaden the trade war to the vast services sector.
“The mechanism and products concerned are not yet decided, it’s a discussion taking place between EU members,” French government spokeswoman Sophie Primas said on RTL radio.
“But we will also attack services – services are for example digital services, which are not taxed today and could be.”
Asked about this and if Ireland would be pushing for the EU not to retaliate against US tech companies, the Taoiseach said “negotiation is the desired outcome”.
He also said; “there will be judgment calls to be made here at Commission level.
“We will input into that and give our perspective on it.
“The desired outcome is negotiations between the US and the European Union.
“We do not favour a digital services tax.
“And I think this has to be a considered response, a measured response, and one that is clearly calculated and calibrated not to bring more damage upon the European economy and European citizens.”
Asked if an EU-wide digital services tax was among measures being considered by the Commission, Michael McGrath, Ireland’s European Commissioner, said: “The focus, in the first instance, is on trade and the negotiations that now need to happen over the period ahead.”
He added: “The EU is not at the point at looking at other instruments.
“Our focus is on trade, trying to get a good outcome in respect to trade negotiations, working with the United States in co-operation to deal with the challenges that are there.”
Ireland will “not be shy” when it comes to its interests and the strategy being devised by the European Union in response to US President Donald Trump’s trade tariffs announcement, according to Taoiseach Micheál Martin.
He also said Ireland is opposed to a digital services tax aimed at US tech companies, an idea floated by France on Thursday, Cormac McQuinn reports.
Trade matters are the responsibility of the European Commission but Member States do offer their views on the EU’s policies.
Asked if Ireland would resist retaliatory measures from the EU that would disproportionately impact Ireland Mr Martin said: “there has to be a collective response” and “It’s going to be extremely difficult to get the right balance.”
He said the European Commission has been “very much looking towards” negotiations with the United States.
He also said: “even right now those countries with a car industry, automotive industry are really getting an exceptional hit.
“So there has to be solidarity across the board” and Ireland is “inputting into this.”
He said: “We have made our views known to the Commission at official level”, he himself has spoken to Commission President Ursula von der Leyen and Tánaiste Simon Harris has been in contact with Trade Commissioner Maroš Šefčovič.
He said: “no country is going to be shy, and Ireland will not be shy … in terms of our interests, but also strategy.”
He added: “The strategy is the key issue here, in terms of designing countermeasures that would have the desired impact of bringing people to the table and enabling negotiations.”
White House press secretary Karoline Leavitt, meanwhile, has rejected the suggestion that Donald Trump will roll back on tariffs, though added the US president is “always willing to pick up the phone.”
When asked by CNN on Thursday if Mr Trump might pull back on implementing the tariffs before they come into effect, Ms Leavitt said:
“The president made it clear yesterday this is not a negotiation. This is a national emergency. He’s always willing to pick up the phone to answer calls, but he laid out the case yesterday for why we are doing this.”
Separately, Ms Leavitt attempted to allay investors’ concerns saying:
“To anyone on Wall Street this morning, I would say trust in President Trump,” Leavitt said. “This is a president who is doubling down on his proven economic formula from his first term.”
“This is a common-sense policy. And if these countries wanted to negotiate, if these countries wanted to do what’s right, they’ve had 70 years to do it,” she told CNN.
“Instead, they have been ripping off American workers. And President Trump has made it very clear that this is a policy he was going to implement.”
Stocks are tumbling on Wall Street at the start of trading, as New York traders give their verdict on the new trade war unleashed by the White House last night.
As the opening bell rang out across the New York Stock Exchange, the Dow Jones Industrial Average, which tracks 30 of the largest US companies, has plunged by 1,137 points, or 2.7 per cent, to 41,087 points.
Nike is the biggest faller, sliding by over 10 per cent, while Amazon and Goldman Sachs have both dropped by around 6 per cent.
The broader S&P 500 index is sliding down too – it’s down 3.3 per cent in early trading. The tech-focused Nasdaq is being hammered, down 4.5 per cent.
This follows heavy losses in Asia-Pacific markets earlier today, where Vietnam’s main share index slumped by 6.8 per cent after Vietnamese goods were hit with a new 46 per cent tariffs.
European markets are deep in the red too, with the UK’s FTSE 100 index is now down 1.6 per cent or 138 points, at 8469 points. – The Guardian
Trump’s tariffs will cause “serious damage and disruption” to the EU and the global economy, according to Minister for Public Expenditure Jack Chambers.
Speaking on RTÉ’s News at One today, Mr Chambers said as an open trading economy, “Ireland is particularly at risk.”
“What I would say as well to balance against that is that we are coming from a position of strength with full employment, inflation has moderated and we are running surpluses,” he said.
Uncertainty and instability, however, will affect investment decisions and the prospect of increased jobs growth in the coming years, he said.
“This is the first chapter on what will be a long, protracted degree of uncertainty that we haven’t seen for decades and in fact it’s one of the biggest disruptions to global trade in over 100 years,” he said.
What are the real life impacts of Donald Trump’s tariffs?
Irish Times economics analyst Cliff Taylor explains here:
Ireland’s European Commissioner Michael McGrath was at this afternoon’s press conference with the Taoiseach after the pair held talks in Government Buildings, Cormac McQuinn writes.
Mr McGrath said Commission President Ursula von der Leyen made “the point quite rightly that what has been announced in terms of the imposition of universal tariffs is a major blow to the world economy.”
He said: “It creates a deepened level of uncertainty, and where you have uncertainty, you only have losers.”
He said the Commission’s first message is it is “ready to negotiate” with the United States adding: “There has been engagement between Commissioner [for Trade Maroš] Šefčovič, [US] Secretary [Howard] Lutnick and others over the last number of weeks”.
“We are now ready to step up those negotiations over the days ahead.”
Mr McGrath said: “the second message is that we will continue to diversify our trade relationships.
“The EU is a powerhouse in international trade, and more and more countries around the world are engaging now proactively with the European Union with a view to entering into trading agreements, because they see the EU as a very safe, trusted and reliable partner that honours its international commitments when it comes to trade.”
He said the Single Market needs to be strengthened and the EU “must address the competitiveness challenges that have emerged in recent years” and close the “productivity gap that has arisen between the EU and the US and China”.
Mr McGrath said that provisional estimates show that “around €380 billion of EU exports will be subject to the additional tariffs” levied by the US.
This includes approximately €290 billion subject to the “so-called reciprocal tariffs” announced on Wednesday, €26 billion subject to US tariffs on steel and aluminium, and €67 billion subject to US tariffs on cars and car parts.
Mr McGrath said: “This would represent, overall, around 70 per cent 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 relationship between the US and the EU is “mutually beneficial” and “we need to work together to address the global issues that are there in respect of barriers to entry to certain markets, in relation to over-capacity, in relation to subsidies.”
Mr McGrath insisted however that “the EU is not the problem.
“The EU is part of the solution because this mutually beneficial relationship has resulted in millions of jobs being created on both sides of the Atlantic over many, many decades, and we want that good co-operation, that strong relationship, mutually respectful and beneficial to continue.”
The Commissioner for Democracy, Justice, the Rule of Law and Consumer Protection also said he wanted to “underline is the importance of unity at an EU level”.
He said “acting as a bloc, the fact that trade is a competence of the European Commission in full consultation and agreement, of course, with the Member States gives us a collective strength that we would not have individually”.
He said: “our greatest prize is access to the EU single market of 450 million people, the largest and the most important single market in the world.”
Mr McGrath added: “We are entering into this period of uncertainty and turbulence, as a EU from a position of strength.
“We stand ready to negotiate, but we also stand ready to respond and to defend the interests of European businesses and our member states in the event that negotiations fail.”
Ireland “can and will” weather the storm caused by US President Donald Trump’s imposition of 20 per cent tariffs on imports from the European Union, Taoiseach Micheál Martin has said.
Cormac McQuinn reports:
During a press conference at Government Buildings, Mr Martin said: “Ireland believes in open and free trade and that the imposition of tariffs is bad for the world economy.”
“I deeply regret the United States decision to impose 20 per cent tariffs on imports from across the European Union. We see no justification for this.”
Mr Martin outlined how more than €4.2 billion worth of goods and services are traded between the European Union and the US every day.
“Disrupting this deeply integrated relationship with tariffs and increased protectionism benefits no one,” he added saying: “Tariffs drive inflation, hurting people on both sides of the Atlantic and they put jobs at risk.”
Mr Martin said Ireland will “now reflect with our European Union partners on how best to respond.
“It is important that our response is considered and measured. Any action should be proportionate, aimed at defending the interests of our businesses, workers and citizens.”
He said: “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.”
According to the Fianna Fáil leader: “Ireland will be a strong advocate for a constructive solution which enhances the existing and strong transatlantic trading relationship.
“As a small, open economy and as a country that has built our prosperity on a policy of free and fair trade, there is no doubt that the imposition of tariffs by the US will have an adverse impact.
“Ireland’s priority is the protection of jobs and our economy.”
Mr Martin also said: “We are starting from a position of strength and our economy is resilient.
“It is important that we focus on factors that we can control including improving our competitiveness and investing in infrastructure.
“By working with Irish-owned companies, with multinationals based here, with our European Union partners, and bilaterally with the United States, we can and will weather this storm.”
The Other Big (and Sad) News in Ireland today – death of Mick O’Dwyer
The Tánaiste has described Mick O’Dwyer as one of Ireland’s greatest GAA icons, Marie O’Halloran reports.
The Dáil discussion on the US tariffs was briefly interrupted for tributes to GAA legend Mick O’Dwyer, who has died at the age of 88.
Tánaiste Simon Harris said “it is with tremendous sadness that we’ve learned of the passing of one of Ireland’s greatest GAA icons.
“His contribution to Irish sport, to community life was extraordinary, and particularly in his native county of Kerry though we do like to claim a bit of him for the great joy he brought us in Wicklow and to many other counties.
“I think of him, his family today on his passing and all of his The GAA family as well. May he rest in peace.”
©INPHO/Billy Stickland
Earlier during finance questions TDs also paid tribute.
Fianna Fáil North Kildare TD Naoise Ó Cearúil. He too said he was a GAA legend, “particularly in Kerry, but we have a great fondness for him in Kildare for delivering two Leinster titles and getting us to an all-Ireland final.
“I was quite young at the time, but they’re very positive memories, and just acknowledge him and his contributions to Irish society over those many years.”
Minister for Finance Paschal Donohoe said “May he rest in peace. I know many members of the GAA family in Kildare will be feeling particularly sad today.”
Fine Gael Wicklow-Wexford TD Brian Brennan recalled involvement with him in Wicklow GAA. “I was sponsor, and he was manager, and one of the most amazing characters I’ve ever come across. And the legacy he’s left in the GAA world is priceless.”
US charged EU €4 billion more in tariffs in 2023 than were levied by the Union.
There is an interesting fact sheet from the EU setting out all the facts about trade, services, VAT and tariffs as they apply in the Union, and also in the States.
There are some very interesting facts. For one the EU enjoyed a trade surplus of €157 billion in relation to goods in 2023. However, the US had a surplus of €109 billion in terms of services. When goods and services were combined, the EU had a surplus of €48 billion.
The fact sheet also discloses that the EU collected €3 billion in tariffs from the US in 2023 but, in the same year, the US collected €7 billion in tariffs from the EU- some €4 billion more. It also debunks the notion that VAT is a tariff, setting out that the tax is applied universally to all goods in the EU States, irrespective of their origin. The tax is applied equally to goods from inside the EU and goods from outside the EU.
It is the equivalent of the sales tax in the US, which applies to EU goods as well as to American-produced goods.
The view of the Economist on Liberation Day – it’s not good.
The Economist has used clever word play for its cover headline, branding Wednesday’s announcement in the White House Rose Garden as ‘Ruinaton Day’.
It goes on to say that almost everything President Trump said abut history, economics and trade during the press conference was “utterly deluded”.
Von der Leyen to hold strategic dialogue with pharma industry on Tuesday
Tánaiste Simon Harris has been fielding questions about tariffs in the Dáil, writes Marie O’Halloran.
He warned that “we shouldn’t fool ourselves” that pharma will not be included in the US President’s tariffs.
Simon Harris told TDs that pharmaceuticals were exempted from the US administration’s list last night.
“But we shouldn’t fool ourselves that there aren’t further plans in relation to sector specific measures, including pharma,” he said.
He told the Dáíl that EU Commission President Ursula von der Leyen will hold a strategic dialogue with the pharmaceutical industry next Tuesday. Mr Harris said this was an important step.
Labour Party TD Duncan Smith said the tariffs imposed risk “plunging us all into a global recession”.
Hitting out at the US president he said he “exhibited zero economic rationale for pursuing this approach or perhaps proved why he is one of very few people who issued a plan that ended up bankrupting a casino”.
EU Commissioner Michael McGrath in Dublin for meeting with Taoiseach
The Commissioner for Democracy, Justice, the Rule of Law and Consumer Protection is in Dublin today for a meeting with the Taoiseach, and also his erstwhile boss, Micheál Martin.
They will have much to discuss, but we expect the subject matter to be the impact of tariffs. Both politicians are due to hold a joint press conference at 1.30pm.
Harris again emphasises need to be calm in response to tariff hikes
Leaders’ Questions in the Dáil has unsurprisingly been dominated by this issue. Tánaiste Simon Harris, who is taking the questions today, gave a variation on what he said to Claire Byrne earlier on RTÉ.
This is Marie O’Halloran’s report from Dáil Éireann.
Mr Harris said the US president was “determined to have a moment of chaos” in terms of the announcement of the biggest change in terms of trading approach in probably a century.
“He’s had his big bang moment” with tariffs and charts and “now it’s time for calm and measured response”.
“What now needs to happen is negotiation and if I have to try and find some sliver of hope in a very grim and dark situation it is that there were references both by President Trump” and the Secretary of Commerce “about negotiations”.
He was responding in the Dáil to Sinn Féin finance spokesman Pearse Doherty who said that last night the world was “subjected to US trade aggression and to add insult to injury we had to watch the US play the victim”.
During Leaders’ Questions he said the average EU tariff on US goods is 5 per cent but “fact and reality took a back seat last night” when the US president “went on to claim that the EU imposes tariffs of 39 per cent”.
Mr Doherty added that “what Trump did last night was an act of sabotage”.
He called for the convening of the North-South Ministerial Council without delay.
“We need to have a laser focus on the things that we can control” and “we also need to protect our all-Ireland economy”.
Mr Harris said he had spoken this morning to the North’s Minister for the Economy and held a video call with the First and Deputy First Ministers and the Minister for the Economy yesterday.
EU officials fearful that pharmaceuticals could be next
Ireland should be wary of breathing any “sigh of relief” that pharmaceutical exports were not hit by Trump’s across-the-board tariffs, a senior European Commission official has said. Jack Power is reporting on this development.
The EU executive believes everything still points towards the US administration preparing to follow-up with specific tariffs targeting the pharma sector. “We do fear and suspect pharmaceuticals are next”, one commission source said on Thursday.
Pharma products account for a huge amount of Ireland’s large trade flow to the United States. Mr Trump has frequently spoken about bringing the manufacturing facilities of Irish-based pharma companies back to the US.
Trump had singled out steel, cars, pharmaceuticals, semiconductors, and timber as strategic sectors he wants to protect domestically, by levying tariffs on imports from abroad.
The White House previously slapped 25 per cent tariffs on imports of steel, aluminium, cars and car parts, sold from Europe and elsewhere to the US. Expected tariffs on pharma exports to the US from Ireland and other EU states would probably be set at similar levels, the commission source speculated.
Heard and McDonald Islands hit with US tariff of 10% despite being uninhabited.
A 10 per cent tariff placed on uninhabited islands in the Antarctic Ocean is the most bizarre takeaway from Liberation Day. The islands, Australian territories in the Antarctic, do have a large population of Penguins, however.
There has been a lot of amused, and bemused, reaction on social media.
THE ASTI Coercion Instrument – what is the EU’s nuclear trade weapon?
Tánaiste Simon Harris was asked this morning about use of the Anti Coercion Instrument (ACI), writes Jack Horgan-Jones.
The EU developed it a few years ago, partially, in response to Chinese action against Lithuania over support for Taiwan as a way of hitting back against “deliberate economic pressure” against the bloc or its member states. It entered into force in 2023.
It is an extraordinarily powerful tool, variously referred to as the “big bazooka” or “the tariff equivalent of a nuclear bomb”.
“It can be as broad as it likes, as deep as it likes, as long as it likes, as short as it likes – it’s a totally flexible instrument,” was how one Irish Government figure summed it up in recent weeks.
What does that mean in the real world?
Well, it’s quite extensive, to put it mildly. It can target trade in goods or services, impose measures affecting the access of foreign direct investment to the Union, financial markets, aspects of intellectual property rights, access to EU markets and public procurement, restrictions on access by banking and insurance entities or placing certain chemicals, sanitary and phytosanitary goods in the EU, export controls and more – including targeting individuals connected to supposedly coercive jurisdictions.
The EU views the ACI as a weapon of deterrence, outlining that it will “be most successful if there is no need to use it”.
Before deploying it, the European Commission has to first start an examination of the existence of economic coercion, either off its own bat or following a request. This can take up to four months, and if the Commission proposes, the European Council (heads of government in member states), has 8-10 weeks to act. The proposals would have to be confirmed by a qualified majority. The framework envisages a further period of engagement with the coercive actor, before adopting measures “as a last resort” – and only with the support of a committee composed of representatives of Member States. If this is approved, the Commission has three months to impose measures.
Nonetheless, even announcing or hinting at the early stages of using the ACI could be seen as escalatory – something Dublin is strongly urging against.
Further caution expressed by Paschal Donohoe in Dáil
Minister for Finance Paschal Donohoe has warned businesses that there are limits to what the Government can do to support them, Marie O’Halloran reports.
He said that as well as taking initiatives to deal with the US “I also do need to be honest and clear regarding setting expectations of what we can do”.
In terms of trade for Ireland alone “that’s tens of billions of euro. If that is affected in any way, no Government can put in place measures that can take the place of that trade.”
But he said that based on “what is currently happening”, the forecast is “for a lower level of growth, but for our economy still to have very high levels of employment”.
Speaking in the Dáil during finance questions he said the Government would engage with businesses through organisations like the IDA and Enterprise Ireland.
“What we will have to do is engage with companies individually and see how we can assist them in finding new markets or dealing with negotiation.
Russia, Belarus, Cuba and North Korea not on tariff list
There were a number of notable exclusions from the global tariffs announced by the US. They included Russia, North Korea, Belarus and Cuba.
All of those countries are already subject to punitive sanctions, and trade restrictions. The White House said on Wednesday night that those are so high that they “preclude any meaningful trade” with the US.
How can Ireland and the EU respond?
Perhaps the ‘wait and see’ stance is best. Many senior politicians in the Union seem to want to see what impact the announcement by Mr Trump will have.
The immediate reaction has been a fall in European stock markets but that does not provide a medium-term indicator. There have been warnings including those from Ursula von der Leyen who has said the global economy may “massively suffer” as a result of the tariffs.
Already the EU is close to announcing a raft of measures in response to the first round of tariffs on steel and aluminium.
Already, on Thursday, we see governments begin to question the basis of the calculations used by the US to determine the tariffs. China, in particular, has challenged it.
In advance of a meeting of EU trade ministers on Monday, there is a clear appetite for negotiation – some EU States believe that, true to Mr Trump’s reputation as a dealmaker, what was announced last night represents an opening gambit. It is noteworthy that the Executive Order signed in the White House last night did leave room for negotiations.
There are differences among EU States as to the response needed. There are fears in some States, including Ireland, that the proposed tariff on US Bourbon whiskey, will trigger retaliatory sanctions against EU-origin alcohol and food in an escalating trade war.
There is also the difficulty for Ireland of the differential rate of tariffs between this State and the UK, especially Northern Ireland.
Generally, the EU has said it will not stand idly by. That will mean, in the absence of agreement, reciprocal tariffs. There is also some talk of the EU applying anti-coercion measures. These can place restrictions on goods and services, and also on intellectual property rights and foreign direct investment. This is very much seen as the nuclear option and is unlikely to be deployed.
Simon Harris says clear heads needed to negotiate tariffs
The laws of economic gravity will kick in now that the “moment of chaos” has passed, Tánaiste Simon Harris has said.
He has been speaking on RTÉ radio’s Today with Claire Byrne show.
Vivienne Clarke reports that Mr Harris has acknowledged that Mr Trump was determined to have his moment, and he did that on Wednesday.
“Once that moment came, economic gravity and the laws of economic gravity would have to kick in and that there would be a need for mature, calm negotiation on a way forward.
“And in what was a very grim and dark moment for global trade last night, I think the only slight, tiny glimmer of hope in that difficult situation was even an acknowledgment from the US president himself that there was now scope for negotiation and engagement, and that’s what needs to happen.”
He did warn again that the ‘Big Bang’ of Wednesday night did not mean it was all done, and that his sense was that pharma tariffs were still on the agenda. He said the fact that they were not announced this week means that the EU has a little time on its side.
“Ireland I think has been successful in making the point at a European level that pharma is not just about the Irish economy it’s actually has a very significant impact on the European economy,” he said.
The big pharma companies were not in Ireland just because of the corporation tax, they were here because of access to the EU market with 60 per cent of their products going to European markets, he said.
Statement from the British Irish Chamber of Commerce on US Tariffs on EU and UK Imports
The British Irish Chamber of Commerce has expressed deep concerns about the decision of the US Administration to impose tariffs of 20 per cent on EU imports and 10 per cent on UK imports.
“These measures threaten to disrupt trade flows, impact businesses on both sides of the Atlantic, and undermine the long-standing commitment to open and fair trade.
“It is imperative that the EU and the US engage in urgent dialogue to resolve this disputes,” it has said in a statement.
EU may hit tech giants in tariffs response
The European Union should not rule out targeting US tech companies in the bloc’s retaliation to sweeping tariffs announced by Mr Trump, a senior MEP has said.
Here is Jack Power’s report:
Bernd Lange, the chair of the European Parliament’s trade committee, said tariffs on digital services and tech giants, would be one way to increase the pressure on the US to come to the negotiating table.
Speaking on Thursday morning, European Commission president Ursula von der Leyen said there seemed to be “no order to the disorder” of Mr Trump’s plans.
The head of the EU’s executive arm, which is responsible for the bloc’s trade policy, said it would respond with a series of countermeasures to protect European interests.
The commission had already been preparing to hit €26 billion worth of US goods with tariffs, in response to import taxes Mr Trump previously levied on steel and aluminium last month.
The exact US products to be targeted has been the subject of intense lobbying. The Government has pushed back against plans to hit US bourbon, due to fears Mr Trump would respond with even higher tariffs on Irish whiskey in retribution. France has also raised concerns about bourbon, to protect its exports of wine and champagne from steeper tariffs.
The EU is preparing a further package of retaliatory levies, in response to the vast US tariffs announced on Wednesday.
Northern Ireland once again on the economic frontline
Northern Ireland once again finds itself on the economic front line thanks to the difference in tariffs applied on either side of the border, Freya McClements, Northern Editor, writes.
As part of the UK, Northern goods exported to the US face a 10 per cent tariff, whereas those from the South – part of the EU – face 20 per cent.
In theory, this could give Northern Ireland exporters of products like whiskey a competitive advantage over their Southern counterparts.
But it’s more complicated than that. Post-Brexit, under the Windsor Framework, goods coming into Northern Ireland are treated as imports to the EU, which means any reciprocal tariffs imposed by the bloc on US goods will affect the North as well – potentially creating a point of divergence between Northern Ireland and Britain.
It remains to be seen what the political implications of all of this will be, though this would certainly be problematic for unionists; equally problematic will be what, on the face of it, appears to be the creation of an economic border – at least in regard to US exports – on the island of Ireland.
Speaking this morning, the North’s Minister for Finance, Sinn Féin’s Caoimhe Archibald, said the imposition of tariffs were “deeply regrettable” and warned a trade war would “only fuel inflation and risk recession.”
She has spoken this morning to the Tánaiste Simon Harris and the UK Trade Secretary, Jonathan Reynolds, and ministers will discuss the tariffs at a meeting of the Northern Executive at Stormont later this morning.
Ms Archibald outlined five key asks of the British and Irish Governments.
“First, to keep the north’s unique circumstances in mind in trade negotiations and in terms of any countermeasures.
“Second, to act in concert, and to minimise divergence between Britain and the EU.
“Third, to provide a properly resourced advice service for businesses so that they can understand how tariffs affect them.
“Fourth, to improve existing trading initiatives such as HMRC’s duty reimbursement and waiver schemes.
“Finally, to bring forward an economic package that protects our international competitiveness,” she said.
Suzanne Wylie, the Chief Executive of the NI Chamber, which represents around 1,000 businesses in Northern Ireland, said time was needed to “unpick the detail and digest the implications” but there was “no doubt that these tariffs will have ramifications for businesses in Northern Ireland.”
She said it was time for “calm heads and careful, constructive assessment” and asked that “Northern Ireland and its unique circumstances are adequately considered as both the UK and EU prepare to respond.”
Immediate retaliation would be a mistake, says Bertie Ahern
Former taoiseach Bertie Ahern has said he hoped the EU does not “jump into retaliation” over the US tariffs, writes Vivienne Clarke.
“That would be a mistake,” he told Pat Kenny on Newstalk.
Mr Ahern said it appeared the US president Donald Trump “isn’t big into detail”, his approach was “almost laughable if it wasn’t so important.”
The people behind the scenes apparently did not appreciate details either, he said.
Mr Ahern also said he was still worried about the pharma sector as there could be long term implications.
Global trade landscape now changed, says Minister for Finance
Minister for Finance Paschal Donohoe has said that “the global economic landscape is changed” in the wake of the US tariffs, Marie O’Halloran writes
Speaking in the Dáil he said his department and the ESRI will begin modelling the impact of the tariffs.
He said they would first engage with the EU, engage with companies in Ireland and, hopefully, begin negotiations with the US administration “to see if we can avoid the dark and more damaging scenarios coming to pass”.
He was responding during finance questions to Sinn Féin spokesman Pearse Doherty and Social Democrats’ Cian O’Callaghan.
“I’ve been making the point that at the basis of what we know at the moment, we are moving into a scenario of lower growth and lower employment growth.
“But I’ve been equally clear, there are other scenarios that could affect us, which is why in the time ahead, what is critical is we look at how we can negotiate with the US to see if we can avoid the dark and more damaging scenarios coming to pass.”
He said the measures put in place by Mr Trump “are ones that will not only affect the economy of the world, will have a significant effect on the economy of America as well”.
President of the European Commission Ursula von der Leyen “has been very clear in outlining the fact that we want to negotiate and we want to see if we can find the scenario in which jobs are not further affected, in which incomes are not further affected”.
Mr Donohoe said that the progress made on inflation had been “jeopardised”.
Reaction from other European leaders
Italian prime minister Giorgia Meloni, a close ally of Donald Trump, expressed strong criticism of the tariffs saying they were wrong.
“They are a measure that I consider to be wrong and not in the interests of either party.”
She said the focus now was on avoiding a trade war that would lead to the weakening of western economies.
French president Emmanuel Macron has said he will convene a meeting later this afternoon of all the sectors in France that will be impacted by the tariffs.
The tariffs went against the principle of free enterprise that has been the foundation of western economies, said Swedish prime minister Ulf Kristersson.
UK prime minister Keir Starmer said there would be an economic impact from the measures. He said his Government would react with “cool and calm heads”.
“Nobody wins in a trade war. That is not in our national interest,” he said.
Prime minister Pedro Sánchez said Spain remained committed to an open world but would take measures to protect its workers.
A brilliant illustration of the new North-South divide.
The 10 per cent difference in tariff between North and South is going to be problematic. This post on X from JP Campbell tells it all.
Time for Europe to strengthen itself says McGuinness
Former EU Commissioner Mairead McGuinness has been speaking to RTÉ’s Morning Ireland, write Vivienne Clarke.
She has said: “We are in a different world, but the order has been upended But we are capable of dealing with this. Notwithstanding the worry, you just have to be calm and measured in the worst of times and these are difficult times.”
“I think the EU is already using the time we have, both past and in the future, to avert anything that escalates to a global trade war.
“This is a time for Europe. to realise the new world order and to strengthen ourselves so that we can face into this. And I think that’s what we’re likely to hear later on from the European Commission. But we don’t come to this from a vulnerable position. We are strong and we have to actually believe that and work towards resolving this hopefully through negotiation.”
Tánaiste says working assumption is that US tariffs will be applied on pharmaceuticals
Tánaiste Simon Harris has said it is the Government’s “working assumption” there will be further US tariffs focused on pharmaceuticals.
Speaking outside Government Buildings this morning, Mr Harris said that Mr Trump had to be taken at his work. Mr Trump had said he intended to impose tariffs on the EU, said Mr Harris, and has done that. He said the president has also vowed sectoral tariffs.
“He’s also been very clear that there’s a number of sectors that he wants to take specific measures in relation to. Steel and aluminium, he’s already done. The car industry he’s already done and he’s indicated semiconductors and lumber and pharma.
“Therefore, my working assumption has to be that there will be further measures directed at pharma, or at least that that’s the intention of the US administration,” he said.
Mr Harris said that 80 per cent produced by pharmaceutical companies in Ireland were not finished products. “They’re commodities that actually go back into US factories, create jobs for people to pay taxes there.”
There is also a concern that part of the retaliatory measures being considered by the EU include tariffs on pharma.
Mr Harris pointed out that a number of EU countries also have strong pharmaceutical presences, including Denmark, Sweden and the Netherlands.
Negotiations to ramp up between EU capitals and commission
Trump has put his cards on the table and now the European Union will have to decide how firmly to respond, writes Europe correspondent Jack Power.
European Commission president Ursula von der Leyen this morning said there seemed to be “no order in the disorder” of Trump’s tariffs.
The European Commission, the EU executive body that sets the bloc’s trade policy, had already been preparing to hit €26 billion worth of US goods with tariffs, in response to import taxes Trump previously levied on steel and aluminium last month.
What US products and industries will be targeted has been the subject of intense lobbying. Ireland has pushed back against plans to hit US bourbon with tariffs, for fears that would draw even higher tariffs on things like Irish whiskey in retribution. France has also raised concerns, to protect its exports of wine and champagne from steep tariffs.
There is some talk in Brussels circles that this lobbying effort to remove bourbon from the products targeted in EU counter-tariffs has been successful. One source said EU states would likely vote on a final list of US products to hit next week.
In response to Trump’s wide ranging 20 per cent tariffs announced yesterday, the commission will put together a further package of tariffs on US trade.
The tariffs on all EU imports did not include pharmaceutical exports, however import duties aimed at that sector are expected to follow at some point.
Pharmaceuticals account for a huge portion of Ireland’s exports to the US. The Government will want to keep pharma trade out of the fray as long as possible. That will mean lobbying to make sure EU retaliatory tariffs do not hit US pharma exports. Ireland will have some friends here, Belgium, Denmark and others are likely to share the same view.
Minister for Foreign Affairs and Trade Simon Harris will sit down with other EU trade ministers on Monday. The manner of the response to US tariffs will dominate the agenda.
Brush up on Your Leaving Certificate Calculus
A shock reacquaintance with Greek symbols as the US undersecretary for Trade released the formula used by the US to arrive at its tariffs. As Gavin Reilly, Virgin Media’s renaissance man notes, the starting point for the calculations is the trade deficit, not the actual tariff applied by those countries.
For a further discussion on the maths of it you can follow this Twitter discussion.
Michael O’Leary describes tariffs as “insane” and predicts a recession in the US.
Vivenne Clarke reports: Ryanair CEO Michael O’Leary has said that America has shot themselves in the foot the same as the UK did with Brexit.
“The sooner they get intelligent politicians back in power the better” he told Newstalk Breakfast.
“I have little doubt that the idiotic tariffs are doomed to fail. But we shouldn’t underestimate Trump’s ability to move and change his mind. And I suspect there will be lots of changes in these tariffs in the coming days.”
“We’re entering a period of huge uncertainty, we are entering a period where US consumers are going to be the victims of this insane tariff scheme. All we can do in Ireland and in Europe is continue to trade with each other.
“I think it also puts pressure on the European Union and Ireland to be much more competitive. We can’t afford to be shooting ourselves in the foot with these kind of idiotic measures when Trump is doing such damage to the worldwide economy.”
Mr O’Leary said it was inevitable that there would be reciprocal tariffs from the EU
“Europe has to have some response. Europe has a big trade deficit in manufacturing. Europe will move closer together in terms of trade ties.”
Mr O’Leary also predicted that the tariffs would result in a recession in the USA.
China promises to take ‘resolute countermeasures’.
Denis Staunton reports: China vowed to respond to Donald Trump’s move to impose an extra tariff of 34 per cent on the country’s exports to the United States, yet stopped short of announcing retaliatory levies for now. “China firmly opposes the move and will take resolute countermeasures to safeguard its legitimate rights and interests,” the country’s commerce ministry said in a statement.
Market analysts estimate the 34 per cent tariff announced on Wednesday brings the new effective tariff on Chinese goods entering the US as between 65 and 70 per cent. Notably, Trump also ordered the abolition from May 2 of an exemption on duties for packages valued below $800. That is likely to have impact the likes of Temu and Shein. The US is China’s biggest export market but its share has diminished in recent years as exports to southeast Asia and other parts of the Global South have grown.
European Union response to US tariffs
The EU Commission president Ursula von der Leyen is now speaking live about how Europe will respond to the tariffs of 20 per cent tariff imposed by the Trump administration on exports to the US.
In a long statement she has been saying that the tariffs are a big blow and the “consequences will be dire for millions of people around the globe.”
She said that some of the countries that will be affected most are among the poorest countries.
She has vowed that Europe will respond and will protect its interests and values.
Political Digest
The Inside Politics Digest has been published and takes us through last night’s announcement and its implications.
Like Keith Duggan’s piece, it also looks at Trump’s shabby showmanship.
He made Howard Lutnick, his Trade secretary and the former head of global firm Cantor Fitzgerald, walk up to the podium. Like a child from Rang a hAon, he had to do a ‘show and tell’ with a cardboard sign showing a list of countries with the tariffs applied to them. Lutnick loved it.
And the speech. Rambling. Excessive. Egomaniacal. Mad in places. Self-referencing. It will go down a treat with his base and with parts of middle America.
— Harry McGee
Read the entire digest here or in your inbox.
Sinn Féin warns against any knee-jerk reaction
Vivienne Clarke reports: Sinn Féin’s finance spokesman Pearse Doherty has called for cool heads and a focus on Irish national interests.
There should not be a knee-jerk reaction, he told RTÉ radio’s Morning Ireland. The Irish Government has a role to play here, he said.
“EU counter measures could be as damaging, we need to be very careful. A tariff anywhere on the island of Ireland would not be good,” he said in response to the different tariff imposed on the UK.
“What we’re seeing very clearly is what all the economists have looked at, which is Donald Trump’s tariffs are going to be damaging for the Irish economy, for jobs, for the public finances, but the countermeasures will also be damaging if they are put in place by Europe. So they will push up prices for Irish consumers, they will risk more jobs in Ireland, and they will reduce the finances that we have in terms of tax take, in terms of the public finances.”
“This has to be resolved and we need to look at the policy of de-escalation and the only reason you should counter our continent’s countermeasures is if you believe that it would bring the American administration to the table and allow for a de- escalation.
“We have to have a clear eye at what is important. We need to focus on Irish national interest. Remember, while we do have influence in relation counter tariffs, we will not be able to dictate it. So we could have a situation where countermeasures from Europe could actually be as damaging as what Donald Trump has announced. So we have to be very very careful here and not knee-jerk into any situation in relation to this.”
The infamous Chart
So Mr Trump and his cabinet based the actual percentage level of tariff on individual countries on what the US perceived as the trade barriers imposed on it by those countries. Mr Trump said that the US would be reasonable and apply only half.
It seems that many of the countries that supply clothes and textiles to the US were hardest hit, some with extraordinarily punitive tariffs. They include Myanmar which is trying to respond to the catastrophic damage and huge death toll caused by last weekend’s earthquake.
Vietnam was hit by 46 per cent; Cambodia by 49 per cent, Sri Lanka and Myanmar by 44 per cent, Madagascar by 47 per cent, and Laos by 48 per cent.
Ibec’s Danny McCoy highlights implications which tariff disparity with UK will have for Windsor Framework and for Northern Ireland
Vivienne Clarke writes: Danny McCoy of Ibec has warned that Trump’s tariffs could have implications for the Windsor Framework.
“I think that one thing we have to really see though is the fact that the UK have a 10 per cent tariff and the EU 20 per cent. This has implications for the Windsor Framework and for the no border on the island of Ireland,” told RTÉ radio’s Morning Ireland
“I think this is a very serious issue. And it’s not just what Trump has done, it’s how we retaliate back. If the UK do nothing and the EU come with a 20 per cent tariff, that’ll make it even more complicated.”
When asked what he wanted the Government to do in response to the tariffs, Mr McCoy said: “We’ve been here before with Covid and with Brexit and so some of the measures that we know is state supports are going to be required for those whose demand will go down quite dramatically as a result of these price movements.
“Their workers may need to go on short-time working, we need to have the welfare payments to keep them attached to their employer, not to put them into unemployment. So these kind of shocks that we get, we thought we might get with Brexit, with ports being closed etc. We have the arsenal to do it, we’ll be talking to the Government in the next couple of hours and again tomorrow on many of those different forums. So I think the Government and business can work through this, I’d be calm enough on that front.”
Here’s how The Irish Times has covered the overnight news.
The main story by Pat Leahy this morning focuses on the statement by Ursula von der Leyen that the EU is prepared to respond with countermeasures if talks to Washington fail.
While the 20 per cent tariff will be broadly applied to Irish exports, there does seem to be a reprieve for the significant pharma sector there.
“Material released by the White House last night suggested that pharmaceuticals may not be covered by the so-called “reciprocal tariffs”, which would be a considerable relief to Ireland.
“Mr Trump has previously said the pharma sector could be subjected to specific, dedicated tariffs, though there was no mention of this in his speech.”
Cliff Taylor’s analysis does not mince its words. “It will take some time to play out. But there is no doubt that the sweeping tariffs announced on Wednesday evening in the White House pose a significant economic threat to this State and particularly to investment, jobs and tax revenues.”
He also teases out the implications the disparity between the tariffs imposed on Ireland and those levied on the UK (20 per cent versus 10 per cent) will have on the Windsor Framework.
US correspondent Keith Duggan has a wonderful article evoking the showmanship of Trump but also saying his instincts deserted him. He particularly honed in on the “sad little chart” held up by Howard Lutnick for all the class to see.
Finally, the political digest (published soon) will look at how an economic announcement was made to look like an amateur drama group’s production of the ‘The Greatest Showman’.
What we are expecting this morning
Tánaiste Simon Harris will be speaking at around 7.30am giving his first detailed reaction to the tariffs.
The European Commission is expected to also set out this morning the process by which the EU will respond to the tariffs, and begin to scope out the retaliatory measures that will be taken.
Already most of Mr Trump’s cabinet has been out (mainly on Fox News) giving details of measures and future measures. Howard Lutnick, the Commerce Secretary, has been chiding the EU over the trade barriers on US agricultural products.
He has come out with this outlandish statement.
Two words come to mind. Hormones. Chlorinated.
Welcome to our Live Coverage of the global tariffs on imports to the United States announced by US president Donald Trump last night, including 20 per cent tariffs to “pathetic” Europe.
“I feel that many of you feel let down by our oldest ally,” said EU Commission president Ursula von der Leyen in a video statement last night, in which she promised there would be reciprocal measures.
In Ireland, Taoiseach Micheál Martin responded by saying that the tariffs were bad for the world economy.
“Tariffs drive inflation, hurt people on both sides of the Atlantic, and put jobs at risk.
He said Europe would work in unity and that the Irish economy was resilient and would weather the storm. However, he said the State now needs to focus on factors that we can control, including improving our competitiveness and investing in infrastructure”.
