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Trump's tariffs will harm citizens, says Irish PM

John Campbell
BBC News NI economics and business editor
Getty Images Donald Trump is wearing a navy suit jacket with a US flag pin, a white collared shirt and a red tie. He is looking up with a frown as he sits in the Oval Office, which has two flags on either side of him.Getty Images
Donald Trump has imposed tariffs on imports from Canada and Mexico - but could Ireland be next?

Ireland's Taoiseach (Prime Minister) says US tariffs will "harm citizens no matter where they reside".

Micheál Martin was speaking in Brussels after President Donald Trump said he will "absolutely" impose tariffs on the EU, claiming the 27-country bloc has "treated us so terribly".

He has already imposed tariffs of 25% on Canadian and Mexican goods which will apply from Tuesday. Canadian energy faces a lower 10% tariff.

A tariff is a domestic tax levied on foreign goods as they enter the country, proportional to the value of the import. They are a central part of Trump's 'America First' economic vision.

EPA Micheál Martin at the Informal EU leaders' retreat at the Palais d'Egmont in Brussels, Belgium. He is balding, wearing a blue suit, white shirt and blue tie.EPA
Micheál Martin was speaking at summit of EU leaders in Belgium

He wants to encourage more manufacturing in the US but critics say the move will mostly lead to higher prices for US consumers.

Speaking at a meeting of EU leaders, Martin said Europe will work together on the issue and engage with the US "in a constructive manner".

"We have to see what happens...measure it, calibrate the impacts and develop our response. But I wouldn't do anything prematurely until we see what exactly is being proposed," he added.

Among EU countries Ireland could face the biggest impact if Trump extends his tariffs.

In 2023, the US was the number-one country for Irish goods exports, buying products worth €54bn.

That meant 28% of Irish goods exports were sold into this one market.

Of that €54bn, around €36bn related to pharmaceuticals and chemicals, illustrating how Ireland has become a major offshore manufacturing centre for US pharma companies.

Trade surplus

What is likely to attract the attention of Trump's economic advisors is not so much the volume of goods that Ireland sells to the US, but the large trade surplus that creates in Ireland's favour.

In other words, Ireland sells a lot more to the US than it buys in return.

In fact, official US data suggests that only China, Mexico and Vietnam have a bigger trade surplus with the US.

What may also catch the eye of Trump's advisors is how much tax big US pharma companies are paying in Ireland, having structured their operations to take advantage of Ireland's relatively low corporation tax regime.