IT IS expected that the Cabinet will be warned today that Irish exports of pharmaceuticals to the US could decline by as much as 50% if the White House follows through on its plans to apply a 20% tariff on the sector.
Tánaiste Simon Harris will outline the potential economic impact of reciprocal trade tariffs between the EU and the US, ahead of tomorrow’s expected implementation of the new arrangement by the United States.
The US market for Irish pharmaceuticals currently stands at around €58 billion with almost a third (32%) of the country’s total goods exports going to the United States. Ministers will receive a memorandum detailing the EU’s advice that all member states can expect a 20% blanket tariff.
Within that, however, the Irish Government will be hoping to exploit the large amount of uncertainty around whether sector or even country-specific tariffs might be applied. Indeed, An Taoiseach Micheál Martin said yesterday that he would be working both within the framework of the EU as well as seeking to come to a bilateral relationship with his American counterparts.
For his part, the Tánaiste was under no illusions that the imposition of reciprocal tariffs by the US and the EU could result in a ‘significant reduction of around half in the amount of pharmaceuticals we are exporting’ over a five year period. Mr Harris also said that ‘all of this is quite volatile and subject to change’ and that Ireland does not want to be ‘in that space’ if it can be avoided.
“We don’t want to be in a space where we are seeing 20% tariffs from the EU, we don’t want to be in a space where we see tariffs from the US, we want to be in a space as a European Union where we can sit down with the United States of America,” said Mr Harris.
“Our economies are interdependent; it’s a trade relationship worth €1.6trillion between the EU and the US every year. No President of any political persuasion can ignore that reality.”
The Tánaiste said that the imposition of tariffs by the US was ‘likely’ but that it was ‘regrettable in advance of even seeing the detail’.
“[It’s] really important in the days ahead that the response from Ireland and the European Union is calm, measured and strategic,” he added.
“We are about to face into one of the biggest economic challenges and how we steer the country through these challenges in the days, weeks and months ahead won’t just impact us for the next few years, it will impact us for the next generation in terms of our economic model.”