LAST UPDATE | 31 Mar

TAOISEACH MICHEÁL MARTIN has warned that “people are suspending investment decisions” as a result of Donald Trump’s tariff war, with the government here now bracing for an impact on the Budget later this year.

Martin said that some EU countries will be “hit very hard” by levies targetting the motor industry as senior Irish government figures seek to lobby for a change in approach from Brussels.

Part of that sees Trade Minister and Tánaiste Simon Harris holding a series of meetings this morning with his European counterparts ahead of US tariffs which are expected to be imposed on the EU this week.

EU member states may face a reported flat 20% tariff on all goods entering the US from Wednesday, in what Trump has labelled ‘liberation day’ and European leaders believe will spark a tough trade war.

Officials in the European Commission are planning to fight back, with a plan to target and squeeze certain sectors in the US.

Taoiseach Micheál Martin discussed this plan, and the impact it could have on the food, drinks and pharma industries in Ireland, with European Commission President Ursula von der Leyen last night.

Von der Leyen “has to balance up various interests” in deciding how to hit back at the US, Martin said in fresh comments this morning.

“Different countries in Europe will suffer from this. I make the overall point, the entire world will suffer from tariffs,” the Taoiseach told Newstalk Breakfast.

Martin said the major shift from the US was leading to a “slowing down” in the market because “many companies are deciding not to invest at the moment, with all of the uncertainty” amid Trump’s threats.

The Taoiseach added that the tariffs are a “very serious threat” and are not providing stability and predictability for businesses.

“They don’t have that at the moment, with the level of uncertainty that’s going on, and so therefore people are suspending investment decisions,” the Fianna Fáil leader said.

Martin admitted this “could very well” impact on the Budget and signalled that the government will try and focus on investment on major infrastructure later this year.

“We’re going to focus our spending particularly on capital,” Martin said, pinpointing water infrastructure, housing and energy as key sectors for investment.

“That whole energy piece is key to get energy prices down,” the Taoiseach said. He added that the government wants to “accelerate offshore wind development” as one of its “long term” plans for the economy.

Tánaiste phoning European ministers

While Europe’s response to the tariffs are being discussed and decided in Brussels, the Tánaiste hopes today’s meeting will open doors for closer relationships with European ministers.

Harris will phone ministers and host one in Dublin today to wargame the fallout of the expected tariffs, which will put Ireland and its economy in a particularly vulnerable position as the country with the largest trading relationship in the EU.

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While government leaders in Dublin are holding internal meetings on the incoming tariffs, it is accepted that the response will largely be EU-led. Public expenditure minister Jack Chambers said on Friday that the response will be based on member states’ input.

In Dublin today, the Tánaiste will speak with Dutch Trade Minister Reinette Klever and the Danish Foreign Minister Lars Løkke Rasmussen on the phone before welcoming Croatian Foreign Minister Gordan Grlić Radman to government buildings.

“How Ireland and the EU respond to the coming days and weeks  won’t just impact the months and years ahead but our economic model and wellbeing for the next generation,” Harris said.

In London, where the UK government are also expecting a slew of US tariffs this week, Britain’s Prime Minister Keir Starmer spoke with Trump last night to discuss the economic relationship between the countries.

A statement states that the leaders agreed that the economic agreements and relationship will “continue at pace this week” and to keep communication lines open between them over the coming days.

Today’s meetings will also give time to Harris to discuss Ireland’s position on the war in Ukraine, in his capacity as foreign and defence minister, to achieve a peace deal.

With reporting by Eoghan Dalton