TAOISEACH SIMON HARRIS has said Ireland will work with the Trump administration, as the country did during his previous term in office, but should prepare for the impact of his presidency on the economy and Ukraine.

Speaking to reporters in Budapest ahead of a European Council meeting, Harris said, as far as he knows, his office has requested a phone call with US president-elect Trump.

“I hope to be in a position to speak to president-elect Trump and to congratulate him,” the Taoiseach said today.

“President Trump has won the election in the United States decisively, and obviously the European Union and Ireland will now work with the democratically elected president-elect of the United States.”

Harris noted that US elections “are always consequential beyond their own borders”, and both Ireland and the EU will “assess what President Trump may do” – and what impact this could have on the economy and European security.

He said European leaders will discuss “how we can best prepare to deal with the new administration”, adding this will likely involve setting money aside for any potential shocks to the economy.

“One of the very reasons we have put money aside into funds to protect for the future is to make sure that if there is any shock to the Irish economy in the years ahead, or to the European economy, or any sort of transatlantic trade shock, that actually there is a buffer in place in the Irish economy.”

‘Insurance policy’ 

When asked how concerned he is about a second Trump presidency, Minister for Public Expenditure Paschal Donohoe echoed the sentiment of needing to put money aside.

He told reporters in Dublin he will challenge anyone who argues that existing government surpluses should be spent, saying they act as an “insurance policy” for the years ahead.

I’ve been arguing about the need not to spend all the money that is available to us each year, to set some of that aside to be able to deal with the unforeseen events around the corner.

He argued this was the right approach when it came to the Covid-19 pandemic and said “surely it will be shown to be the right approach as we now enter into a period of very big change within the global economy”.

Paschal Donohoe speaking to reporters in Dublin today © RollingNews.ie © RollingNews.ie

“We are now in a situation that for last year, we ran a budget surplus in excess of €8 billion.

“The same will happen again this year, and this money will be absolutely vital to help us deal with any changes that could occur in the years ahead due to changes in global trade and in global taxation.

“And for that reason, it underpins the need to continue to build budget surpluses in the future,” Donohoe added. 

Tax rate 

Concerns have been raised of late that a reworking of US tax law could eventually lead to a major drop in Ireland’s corporate tax take.

When asked if he is concerned that Trump’s proposals to overhaul tax legislation could led to a large outflow of foreign direct investment from US companies currently based in Ireland, Harris said no.

“We obviously need to continue to monitor all of this closely, and we do need to be aware that the risk of a transatlantic trade shock has now increased.”

The Fine Gael leader said companies locate in countries “for many reasons, not just tax”.

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“Ireland has always offered not just a competitive tax offering, and not just worked at a global level in terms of settling those tax issues in terms of rates, but we’ve also offered talent.

We’ve also offered access to the European Union. We’ve also offered being a country that can bridge the Atlantic in terms of the US and the EU.

“And I think all of those things remain a reality after the outcome of the presidential election.”

Ukraine

Speaking about the impact of a Trump presidency on the war in Ukraine, Harris said more investment in defence and security is needed across Europe including Ireland.

“Just because you’re militarily neutral, it doesn’t mean that you’re immune from those risks.”

He denied this will impact Ireland’s military neutrality, saying that “is not up for discussion”.

Ukrainian President Volodymyr Zelenskyy is due to attend today’s European Council meeting and Harris said he is looking forward to speaking to him directly.

“Europe has to stand with Ukraine for as long as it takes. We cannot have a situation where a country can, through aggression, through illegal war, annex people’s territories,” Harris stated. 

He said the EU and other leaders such as British Prime Minister Keir Starmer will work together in efforts “to chart a way forward to bring peace to Ukraine”.

Contains reporting by Jane Matthews