Duncan Smith (Dublin Fingal East, Labour) | Oireachtas source

I am sharing time with my colleague, Deputy Marie Sherlock.

I was taken with the comments of the Minister for Finance, Deputy Donohoe, in his contribution earlier. The Minister has been Minister across the finance briefs for many years, through a number of crises. His general approach to things is one of calm. He is not one for hyperbole. He spoke about global economic activity increasingly fragmenting along political lines, about storm clouds and about how tariff-related issues will interact with other structural challenges, such as ageing populations, AI, climate change and high public debt, and he called it unprecedented. Having said that, I hope the Minister will be more open to instruments that could help to protect the Irish economy and Irish workers. He has set out just how serious this issue is. However, the truth is that at this point we do not know how much damage these tariffs will do to the Irish economy. We know that a 20% flat tariff will apply to all EU exports. We also know that tariffs on pharmaceuticals are likely to come, probably in the near future. There is a real risk here, maybe not in the immediate term given the nature of the pharma industry, but certainly in the medium term. We have seen the Trump Administration's response to China's response to the tariffs that it is willing to essentially go nuclear. What we are seeing now between the US and China is so concerning that there is further pressure on the EU to respond correctly and in a serious manner but in a manner that minimises the damage to our domestic economy. That is not an easy challenge.

That is why we have to be as proactive as we can in our approach. There must be a comprehensive assessment across the economy of which sectors are affected and which jobs and potential job growth sectors will be affected. That will allow us to ensure that supports, where needed, can be targeted, and that we can ensure we are developing the right instruments to deliver those supports. We can say with some certainty that the agrifood and dairy industries could be especially hard hit, with many small businesses coming under extreme pressure and with small exporters that make specialised parts in this industry being exceptionally hard hit.

During Brexit, our European allies stood firm with us in protecting both our economy and peace on our island.

We must now stand firm with those allies and work together to combat these tariffs. The EU does have significant power and agency but they must be used wisely. This is a time to be strategic while also being firm in how we negotiate. We cannot allow a precedent to be set where the Trump Administration gets to bully its so-called allies and get everything it wants. To that end, it is vital that across the House, we see what the proposals from the EU are before they come into being. This is not a situation where the US holds all the cards. While there will need to be negotiations, we come to them in a position to exert a significant amount of leverage on the US economy and we must be prepared to do so. The EU also has an anti-coercion instrument that can be deployed against tech companies if needs be. While we do not want it to get to that point, no option should be taken off the table. That is, of course, if the Trump Administration is actually interested in coming to the table in the first place.

At home, we need to learn from the past and be much more agile in how we respond to economic shocks. There are a number of measures for which the Labour Party is calling, informed by our experiences through Brexit and the Covid pandemic while acknowledging that neither of those two shocks are the same as what is happening now. We want to see a comprehensive assessment of the impact tariffs will have on Irish companies and Irish jobs. Only then can we plan properly for how we can support our people, workers and businesses.

We also want to see a short-term wage subsidy scheme. We would like to see a marketing fund for sectors such as agrifood and dairy to open new markets, and a credit guarantee scheme to support businesses. The concept of a short-term wage subsidy scheme like the German Kurzarbeit model that keeps people close to their employers in periods of uncertainty or turbulence is something for which Labour has been calling for a number of years. Indeed we are not alone in calling for such a scheme, with ICTU calling for such a scheme during Brexit for the agrifood sector and IBEC calling for a similar scheme. Such a scheme could support companies affected by the tariffs to hold on to some of their skilled workers as they adapt to changed trading rules and help develop new markets. This could be a vital move to hold on to our economic competitiveness for when this storm passes. It would protect employees from redundancies with State subsidies and shorter working hours when companies encounter difficulties. Importantly, like the German Kurzarbeit scheme, it would guarantee that each worker has access to training or upskilling to improve productivity and prepare workers for potential new opportunities. The scheme could be funded through the Social Insurance fund and the National Training Fund, both of which are in substantial surplus. The Social Insurance Fund ran a surplus of €2.7 billion in 2024 with an accumulated balance of over €10 billion this year while the National Training Fund has a surplus of about €1 billion. Such schemes are not without precedent in Ireland. During the pandemic, we had the temporary unemployment wage subsidy scheme. The Minister should be looking at an emergency measures in the public interest Bill to address the impact of tariffs. I again emphasise that we are not calling for the exact same schemes. What we are calling for would be much more targeted and sophisticated but what those schemes show is that the State can act to protect jobs. What we are calling for is for the State to act to protect jobs. While the smaller details still need to be established, we do know the big sectors that are going to be most affected are likely the agrifood sector and the pharma-medical device sector. Of course, there will also be the unexpected areas hit. Again, we need to ensure that we are agile.

Other big sectors are now also facing massive impacts, such as the Irish whiskey sector. Many distilleries will be funded through long-term loans built against their stock and there will be a need to provide targeted supports like more low-interest long-term financing and a marketing fund. The goal of State action must be focused on allowing companies to adapt to changed trading realities and retain their skilled and experienced workforce as much as possible.

International trade has long been a powerful driver of economic prosperity. As a small, open economy, Ireland has benefited greatly from the free exchange of goods and services across borders. Our trade relationships with the EU to the US and beyond have helped fuel our growth and bolster the standard of living for millions of people in this country, although I acknowledge that we are not without our problems and still have a number of structural crises we need to resolve with the prosperity that has been created. Yet trade is not simply about economics. Again, this is what I found interesting about what the Minister for Finance said earlier. Trade is a tool for diplomacy and co-operation and, until recently, we in the western world have looked at the mutual dependencies that trade has created as helping to foster peace and stability. Just because the US has decided to abandon diplomacy and co-operation, it does not mean that the rest of us have to. As an EU member state, Ireland is committed to multilateralism, rules-based trade and a rules-based order and that will not change nor should it. Our participation in the Single Market has not only boosted our economic fortunes but has also anchored us to our allies who share our values of democracy, fairness and peace. Whether it is Canada, Latin America or Asia, there are markets out there we have not fully harnessed due to our reliance on our hitherto very close relationship with the US but we must look at exploring these markets.

We also need to acknowledge that the attacks on democracy that we have seen around the world are concerning. The fact that only 25% of global citizens are living under liberal free democracies compared with 50% in 2004 is worrying. The rise of autocracy and authoritarianism that seems to have swept the globe needs to be a wake-up call for all of us to take a stand against the US attempts to weaken other democracies. What none of us or any economist of good, bad, indifferent or excellent standing can understand is, "Why use tariffs?" They have never worked. Nobody wins. It is a lose-lose situation. There has to be a motivation within the US Administration such that they are being used in a weaponised capacity to hurt the countries to which they are being applied, which is, more or less, every country in the world, with the likes of Russia and North Korea being spared at this time.

While this House has seen significant divides in recent months, indeed a lot surrounding the issue of democracy, this is now a time to come together. We can work together with our allies in Europe to put pressure on the Americans and Trump to change course. We have done it before and we can do it again.

To those who may be listening in and are fearful of the future, I say that this storm needs to be weathered. To young people who have seen three global financial emergencies in their short lives and are growing up in an era of economic migration and emigration, I would say that this is a storm we need to weather. We need to show our young people that we in Ireland and Irish leaders are doing everything we can to protect jobs and provide opportunities here so they do not have to leave our shores. That is the challenge for this Government and this House.

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