Dr. Conor O'Toole:

The impact of tariffs is as complicated as it is multifaceted. Regarding what to expect, we can differentiate between the short-term impact and the long-term impact of them. If we look at some of the data for the first quarter of this year, in the short term, we saw a massive increase in exports, as firms moved goods and inventories back to the US to try to avoid the introduction, in early April, of the tariffs. In the short term, there is a lot of variability in a lot of firms' specific flows to try to avoid the tariffs.

In the longer term, what happens will depend on two things, namely, the rate of the tariffs that stays on a more permanent basis. For example, if we land at a more benign tariff, especially one that might give exemptions to areas like pharma, then the impact will be much less that it would otherwise be. If it is a much more aggressive tariff, and that stays on a more permanent basis, with firms having to start planning on that basis, then it is likely to have a bigger impact.

With the tariffs we are only talking about the goods side of the economy, which accounts for about half of our exports. Half are services and half our good. Within goods, pharma is the big one, comprising about half of the country's goods exports. The question is to what extent would firms reshore activities to sell into the US domestic market or how much will they leave in third countries to export to the rest of the world. These are very complicated, firm-specific decisions but all of these elements will lead into what the direct impact on the strategies will be for Ireland.

In general, tariffs and the uncertainty about the rate setting are bad for investment. Rates of investment are slowing, as can be seen in the data up to now. Firms will pause and hold off on capital deployment until such time as they can-----