Consumer confidence falls as Trump targets €44bn in Irish pharma exports
Industry leaders have urged the EU and US to pull back from a trade war, saying that tariffs on Ireland's pharmaceutical industry would be 'serious'.
Irish households' confidence in the economy has plummeted over fears of a global trade war as US president Donald Trump places Ireland's €44bn pharmaceutical exports directly in the crosshairs.
The sector has been the jewel in Ireland's outward-facing economy for half a century, employing 80,000 people. Industry leaders have urged the EU and US to pull back from a trade war, saying that tariffs on Ireland's pharmaceutical industry would be "serious".
Donald Trump on Wednesday singled out Ireland as he pledged to impose tariffs on pharmaceutical imports to the US.
"We're going to be doing tariffs on pharmaceuticals in order to bring our pharmaceutical industry back," Mr Trump said in the Oval Office.
The move comes just days before the EU and US engage in reciprocal tariffs on a range of items, which could end up costing the Irish economy billions.
Speaking in Paris on Thursday, Taoiseach Micheál Martin said that he hopes the two sides will engage and find a "sensible solution" and said that the Government could not downplay just how seriously impacted the country would be if the tariffs are imposed.
"From our perspective, we don't understate the seriousness of the impact of such tariffs on the European economy and the Irish economy," Mr Martin said, pointing to dire ESRI projections of a loss of €80bn to the economy.
"We are worried. We're concerned about it, but we're working flat out and I have been in touch with a number of multinational companies based in Ireland.
The latest report shows Irish households' confidence in the economy has fallen to a 10-month low, with the prospect of a trade war with the US being cited as a major concern along with the potential for price increases.
According to the survey, fear is the key driver of the drop-off — rather than increased financial pressure — as consumers downgrade their outlook for the economy and household finances.
Faced with the growing threat of a trade war, economist Austin Hughes said it is “not a surprise” that Irish consumers “materially marked down their views on the outlook for the Irish economy this month”.
"The prospect of a trade war leading to job losses, weaker tax revenues, and a less supportive fiscal stance as a result is likely to have been the main driver of weaker sentiment,” he said.
Oliver O’Connor, the chief executive of the representative body the Irish Pharmaceutical Healthcare Association (IPHA), said tariffs from the US on medicines imports from the EU would create significant commercial challenges for companies and have the potential to disrupt supply chains in and out of the US.
" Industry hopes that any tariffs would not persist for long. We hope policymakers can arrive at the re-establishment of the current position of zero tariffs on medicines, which has been the case for 30 years," he said.
Government ministers and senior officials have been involved in extensive engagement on both sides of the Atlantic in recent weeks. However, sources have warned that until tariffs are announced it is impossible to know the total impact on the economy.
To counter tariffs, the coalition is set to put a more urgent emphasis on measures to retain businesses — especially in the pharmaceutical sector.
It is understood enterprise minister Peter Burke will bring a memo to Cabinet in the next two weeks on a competitiveness action plan.
This accelerated plan will focus on resolving issues which are seen as blocking further investment such as the energy grid, wastewater connections, and Environmental Protection Agency licensing.
