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LAST UPDATE | 1 Apr 2025
TARIFFS FROM THE US on the pharmaceutical industry could, in the worst-case scenario, halve exports from the Irish sector over a five year period, Tánaiste Simon Harris has said.
Harris, the minister responsible for trade, was speaking ahead of a cabinet meeting this morning where he will brief the government on the potential impact of tomorrow’s tariff announcement from US President Donald Trump.
Taoiseach Micheál Martin has already warned that the tariffs “could very well” impact on the Budget later this year, and signalled that the government will try and focus on investment on major infrastructure.
Twenty percent tariffs are expected to be announced by Trump on the EU tomorrow in an event he has dubbed as “liberation day”, a move expected to spark a tough trade war.
Harris told reporters this morning that he wants the EU to take a “calm, measured and confident” approach to its response, which is expected to target and squeeze particular sectors in the US to put pressure on Trump allies.
There are particular concerns over the Irish pharma sector as many US companies have bases in Ireland. The Tánaiste said he has been engaging with European counterparts with a similar pharma sector to coordinate a response.
Questioned on reports that exports from the pharma industry would halve as a result of the tariffs, he said scenarios – which are being discussed and developed in government – point to situations where that might be the case.
“I want to emphasise the point – we don’t want to be in that space. We don’t want to be in a space where we’re seeing 20% tariffs on the EU. We don’t want to be in a space where we see tariffs on the US,” Harris said.
He added: “Our economies are interdependent. It’s a trade relationship worth €1.6 trillion, between the EU and the US every year. No president of any political persuasion can ignore that reality. It’s a huge, huge, huge impact on both sides of the Atlantic.”
“I do think there is now a shared understanding of the importance of pharma to the European economy, as opposed to just Ireland,” he said.
He pointed out that the EU has allowed American firms to grow, with 60% of exports from Ireland being directed back into the EU. Of the shipments sent to the US, Harris claims 80% of the products are materials, rather than complete products.
“In other words, it goes back into US factories, where US workers add value, where US workers have jobs and pay taxes,” he said.
“The issues of global supply chains, impact on patients and access to medicine, I think, is going to very quickly come to the fore as we begin to tease through the detail. First thing we need, though, is the announcement.”
Harris will tell Cabinet that 32% of Ireland’s goods exports go to the US, while 17% of our imports emanate from there.
Martin said that he also wants to see the EU respond in a strategic manner and continue negotiations to mitigate as much of the expected impact from the tariffs as possible. He added there has been constant communication between government and the EU.
“There is a lot of uncertainty being created,” Martin told reporters. “There’s a lot of instability being created in the financial markets, which, in itself, can have a damaging impact on investments.
“There is evidence that many major companies are now pausing investment decisions until all of this settles down. What one would hope for is that – arising from the European Union’s response to the American tariffs – that a period of negotiation would ensue.”
Later today, Harris will hold trade talks with the Italian Foreign Minister Antonio Tajani. It follows a series of meetings he held with his ministerial counterparts from the Netherlands, Denmark and Croatia on Monday.
On Friday, the Tánaiste will host a further meeting of the Government’s Trade Forum before travelling to Luxembourg on Sunday for a key meeting of EU Trade Ministers
At this meeting, Ministers including the Tánaiste are expected to make decisions in relation to how the EU retaliates in light of any new US tariffs.
Meanwhile, Public Expenditure Minister Jack Chambers is set to outline the process to update the National Development Plan (NDP), which sets out the State’s capital investment strategy.
It’s understood that this has taken on a greater significance in the context of the US tariffs.
Chambers will tell Ministers that the best way to safeguard against the impact of tariffs is to focus investment in capital public projects and to tackle infrastructure deficits, which is “critical” to boosting economic growth and enhancing our competitiveness.
It’s expected that there will be a particular focus in the review on supporting housing provision, as well as greater investment in energy, water, transport infrastructure and health digitalisation.
The review of the NDP is due to be completed in July.
Chambers will tell Cabinet that the review will cover all public capital investment up until 2030 and will utilise all State funds, including the escrow funds from the EU Court of Justice ruling, the Infrastructure, Climate and Nature Fund, and the proceeds of the AIB share sales.
Cabinet ministers will be asked to identify projects which can be delivered, on time and budget, with a particular focus on achieving value for money.
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