Donohoe ‘extremely concerned’ over potential impact of tariffs
The Minister for Finance has said he is “extremely concerned” about the potential impact of proposed United States tariffs on pharmaceutical exports, warning they could deliver a major blow to Ireland’s economy.
Speaking on RTÉ’s Prime Time programme, Paschal Donohoe said the Government is preparing for “real and significant” difficulties if US President Donald Trump follows through on threats to impose tariffs on drug imports, including those from Ireland.
“I want to underline the scale of the change that we might have to deal with, the various significant and real difficulties that could present for our economy,” the minister said.
He said the Government is preparing for serious disruption – but expressed confidence that Ireland is well equipped to meet the challenge.
“I believe that collectively, we will be able to rise to the test. I’m not going to deny for a moment, there will be challenges. It’s going to be so difficult, but that’s where our focus and our work will now begin,” he added.
It comes after Mr Trump last night said the US will be introducing tariffs on pharmaceuticals – specifically citing Ireland among the countries where many pharmaceutical products are made.
Mr Trump said on Wednesday that his proposed tariffs are intended to bring pharmaceutical production back to the US claiming, “We don’t make anything” domestically.
Before Mr Trump’s remarks, Minister Donohoe had already warned that between 50,000 and 80,000 Irish jobs could be at risk if tariffs are introduced, with the potential for a 2–4% hit to GDP in a worst-case scenario.
Irish goods exports to the US reached a record €72.6 billion last year, a rise of more than a third compared to the previous year, with pharmaceuticals accounting for a significant share of the total.
Mr Donohoe said the impact of such tariffs would be felt more keenly in Ireland than in most other countries, given the size and importance of its pharmaceutical exports.
“We are facing a complex and significant economic challenge that really does matter for Ireland. We have faced so many challenges over the last decade,” the minister said.
“I regret we’re facing into one like this again, but we are, it’s the world as it is, and we need to work together, and the Government will, with the sector, with our economy overall, to deal with these issues in so far as we can,” he added.
Mr Donohoe acknowledged that the proposed tariffs would present a major economic challenge with wide-reaching consequences but stressed that Ireland is well-equipped to respond.
“I want to underline the scale of the shock we could face here in Ireland – a challenge that, as it develops over the medium term, will matter deeply to households and businesses,” he said.
“But we are approaching this from a position of strength. Our public finances are in surplus, 2.8 million people are at work in our country, and we have to use those strengths to help navigate our economy and our people through what may lie ahead.”
‘Challenging times ahead’ for pharma companies amid Trump tariffs
The Chief Executive of the Irish Pharmaceutical Healthcare Association has said that the pharmaceutical industry does not want to see tariffs, or retaliatory tariffs, on medicines introduced.
Speaking on RTÉ’s Drivetime programme, Oliver O’Connor described the situation as “very challenging” for pharmaceutical companies across the European Union, which export to the United States.
Responding to Mr Trump’s comments, Mr O’Connor said: “There are very challenging times ahead, challenging issues for companies to address, and challenging issues for policymakers to address across the Atlantic in that relationship.”
Mr O’Connor said that reciprocal tariffs would not be helpful in this situation.
“It raises the cost of medicines everywhere, and it makes the economic production of it, for all markets, much more difficult,” he said.
“For that reason, pharmaceuticals or medicines have been exempt from tariffs for the last 30 years under [a] World Trade Organization agreement.”
Mr O’Connor said that the pharmaceutical industry is hoping to see an “open, balanced, economically efficient trade relationship” across all sectors.
He described the Irish pharmaceutical industry as a “key asset” in global supply, adding, “they won’t easily just drop us”.
This is not the first time the US President has cited Ireland in reference to the pharmaceutical industry.
During a meeting with Taoiseach Micheál Martin in the Oval Office earlier this month, Mr Trump accused the Irish Government of “taking” US pharmaceutical companies through attractive taxation measures.
“All of a sudden Ireland has our pharmaceutical companies, this beautiful island of five million people has got the entire US pharmaceutical industry in its grasps.
“We don’t want to do anything to hurt Ireland, but we do want fairness and he understands that,” Mr Trump told the Taoiseach.
Last week, US Commerce Secretary Howard Lutnick called Ireland his favourite “tax scam”.
“We’re going to try and fix a whole bunch of these tax scams. Ireland is my favourite,” Mr Lutnick told the business and technology podcast All-In.
He also claimed that Ireland has all the US multinational pharmaceutical and technological intellectual property (IP) rights, which, he said, leaves the United States worse off.
Donald Trump made the remarks about Ireland last night while threatening larger tariffs on the European Union and Canada if they both work together “to do economic harm to the USA”.
Mr Trump also unveiled a 25% tariff on imported vehicles, expanding a global trade war and prompting criticism and threats of retaliation from affected US allies.
The Taoiseach said he is concerned about the impact of potential tariffs on pharmaceuticals.
Speaking in Paris, where he was attending a summit on Ukraine, Micheál Martin said tariffs and a trade war will have very negative consequences for all involved.
He said he hoped that “substantively the EU and the US will engage in discussions to come to a sensible resolution” on the issue.
The Taoiseach said there have been close contacts with the pharmaceutical industry in Ireland and he has been in touch with a number of multinational companies based here.
Mr Martin said: “We believe tariffs will damage broader economies across the world, will damage the American companies who are located in Ireland, not just here but in America as well, because these are complicated supply chains between Ireland, Europe and the US in the pharmaceutical area.”
‘Talks rather than tariffs sensible way to proceed,’ says Tánaiste
Meanwhile Tánaiste Simon Harris said he believes “talks rather than tariffs is the sensible way to proceed”.
He said the EU wants to sit down with the US to reach agreement on a trade relationship and added that this “needs to happen”.
Mr Harris said Ireland continues to engage with colleagues in Europe and the US on trade policy, adding that he spoke to both Mr Lutnick and EU Trade Commissioner Maroš Šefcovič this week.
Opposition voice concerns Ireland will be damaged by ‘global economic war’
Earlier, Minister Donohoe was urged to clarify with EU leaders what the bloc’s likely response will be to US tariffs, amid Opposition concerns Ireland will be damaged by any “global economic war”.
Social Democrats TD Cian O’Callaghan called for answers on the issue during Dáil Leaders’ Questions debate.
Addressing Mr Donohoe, Deputy O’Callaghan said: “[US president] Donald Trump has called April 2 ‘Liberation Day’, the day he plans to launch the global economic war.”
He said “Ireland will be impacted” by any tariffs, and warned that our pharmaceutical sector is “in his [Donald Trump’s] crosshairs”.
Responding to the comments, Mr Donohoe accepted the situation is “very serious” but rejected criticism that Fine Gael promised tax cuts and extra spending during the general election campaign which the Social Democrats said may not happen.
Mr Donohoe said the Government is focused on how to “engage” with the US, other EU member states and on what measures Ireland can implement in this year’s budget.
Meanwhile, Ibec Chief Executive Danny McCoy said Mr Trump “doesn’t understand the dynamics of what he’s dealing with” if he introduces tariffs on pharmaceuticals.
Speaking on RTÉ’s Today with Claire Byrne, Mr McCoy said tariffs will make consumers and voters worse off in the short-term.
“Donald Trump has unleashed something onto the United States that he believes he can control, and I don’t believe he can.
“The United States is the most powerful nation on Earth, but it constitutes, even economically, about one fifth of the Earth, so four fifths of the Earth have choices to make here.”
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