‘There is a sense of the unknown’ - Minister reacts to tariff threat

The Irish government is keeping a “close eye” on developments in the wake of US President Donald Trump’s announcement last weekend that he is prepared to slap a 30% tariffs on all goods from the EU from August 1 unless a deal is reached in the interim.

The threat posted on Trump’s own Truth Social platform threw months of painstaking negotiations with the bloc, one of the US’s largest trading partners, into disarray and prompted the European Commission to consider €72bn worth of reciprocal levies should talks with Washington fail.

Minister of State at the Department of Enterprise, Trade & Employment with special responsibility for Trade Promotion, Niamh Smyth, is adjacent to much of the important discussions taking place from an Irish perspective.

The Cavan Monaghan TD says those within the corridors of Leinster House had braced themselves for such an announcement, but few were prepared for the heft of the tariff being proposed by President Trump, who intensified his trade war with neighbour Mexico in the same post.

“I would certainly hope that’s not where its going to land,” says Minister Smyth, repeating the sentiments expressed by Tánaiste and Minister for Foreign Affairs and Trade Simon Harris who said: “Tariffs always hurt. Tariffs are never good.”

The Tánaiste also describes President Trump’s letter on his Truth Social platform as “unhelpful” and “escalatory”, but looked to him a “negotiating tactic”.

“We prefer to do our negotiations around the table,” said the Tánaiste.

Minister Smyth agrees, putting faith in the work being done behind the scenes by European Commissioner for Justice Michael McGrath the EU trade commissioner to try to smooth a path to an eventual agreement in principle for a “landing zone” in terms of rates that satisfy both sides.

“Talk of 30 per cent tariffs would be hugely damaging to the Irish economy and Irish business. I was at the trade forum meeting last week where you heard discussed a worst case scenario of maybe 10 per cent tariffs. We’d love zero tariffs of course but we’ve come to accept that’s not going to be the case.”

Even 10% on EU exports to the US would prove “difficult, it would be challenging”, said Deputy Smyth, with the effects felt keenly here at home as the country closest to America on this continent.

“I’d say the deal is not done yet. We know President Trump tends to do a lot of his negotiating on social media, but as the Tánaiste, the EU prefers to do that sort of work around a table.”

Minister Smyth doesn’t expect the deadline for an agreement to be pushed out any further than it already has, and believes talks will intensify ahead of the deadline.

“There is no point in saying this government isn’t greatly concerned,” she said.

“Every sector, there is a pause, there is a standstill. There is a sense of the unknown and a fear to make a commitment. That’s not good for business, it’s not good for the country, and it’s not good the economy.”

But since taking up her role as Minister for State, Deputy Smyth has been tasked exploring opportunities in potential new markets in the hope of off-setting the worst of any impact on trade to the US in line with increased tariffs.

The signing of a Memorandum of Understanding establishing a Joint Economic Commission between Ireland and the United Arab Emirates in April was more recently followed by attending the Africa Ireland Trade Horizons conference at Dublin Castle earlier this month, seen as an opportunity to strengthen economic ties and co-operation between African countries and Ireland, where trade in goods grew by 7.9%, from €2.4bn in 2023 to a record €2.6bn in 2024.

The focus she says is on building “new collaborations and partnerships”.

“We need to double down on our ability, our readiness to strengthen, and to diversify our trade links. International trade promotion and development remains a key pillar of our competitiveness as a country and there is scope to improve further.”