Catherine Connolly (Galway West, Independent)
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2. To ask the Minister for Finance the analysis undertaken to establish the impact that proposed US tariffs on the EU would have on Ireland; and if he will make a statement on the matter. [4897/25]

Catherine Connolly (Galway West, Independent)
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Baineann an cheist le taraifí agus an rud atá beartaithe ag na Stáit Aontaithe don Aontas Eorpach, Éire go háirithe.

My question relates specifically to the tariffs. What analysis has been done on the impact of the proposed tariffs on the EU, given that Ireland, within the Union, is uniquely exposed, and in light of the policies we have adopted and our stance on Gaza. I realise things are changing by the minute regarding tariffs; they are promised and then not promised. What analysis has been done?

Paschal Donohoe (Dublin Central, Fine Gael)
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My Department, like finance Ministries elsewhere, is assessing the potential impact of tariffs on our economy. The assessment of our economic outlook, which will incorporate the latest developments in the global economy, will be set out in the spring forecast, which will be published in April.

From an economic perspective, the US is our largest bilateral trading and investment partner. In 2023, the latest year for which data are available, Ireland recorded a goods-trade surplus of €50 billion with the US. On the other hand, it ran a services trade deficit of €134 billion with the US across that year. As a result, Ireland recorded an overall trade deficit of €84 billion with the US.

The Government has taken careful note of President Trump's decisions in respect of tariffs in recent days and the agreement to postpone tariffs on Mexico and Canada by 30 days. We regret the imposition of tariffs. Our view is that they create economic disruption and drive up inflation, damaging those on all sides.

Moreover, it is clear that the global economic landscape is changing quickly and the new normal we are about to move into will be very different from what we have had in recent decades. Our economy has benefited enormously from the global economy getting closer. As a major beneficiary from these positive dynamics, the Irish economy is exposed to any potential reversal in global trade. From a policy perspective, the best way to respond to these trends is to focus on those policy decisions that we can control and influence. That is why our competitiveness is so important and why investing in our future remains essential.

Catherine Connolly (Galway West, Independent)
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The figures on our trade with the US, including our exports there, are something else, not to mention the figures on the services we import, which are even double those figures. The figure I have for exports to the US in 2024 is €103 billion. I am not arguing over figures at all; the enormity of the figures speaks for itself. My question is on the analysis that has been done by the Minister. He is saying it has been undertaken and that the results will be published in the economic outlook in April. I would have thought we would have been considering this more acutely now, given that what we are talking about what happened before – in 2019, I believe – when tariffs were introduced and subsequently suspended by Mr. Biden. What did we learn from that?

I agree with the Minister that our policy has brought enormous benefit to the country. However, we have been warned repeatedly that we are in serious danger of relying on a small few companies bringing in a substantial amount of tax. For a long time, we have been under pressure in respect of developing a different type of policy. Extending our policy might be better.

Paschal Donohoe (Dublin Central, Fine Gael)
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As I said to the Deputy, the analysis with regard to this is under way. Owing to the uncertain environment we are in, it is appropriate that a number of weeks be taken to do this work. That work will be concluded and published in April.

On the imposition of tariffs under the first President Trump Administration, two learnings emerged. First, the EU did respond. The EU has indicated it will respond again in a firm and proportional way. Second, we did see across the period in question that the trading relationship and the flow of goods and services between the US and the EU continued to be strong and, I believe, to benefit both sides of the Atlantic. It remains to be seen whether that is possible in the future.

On the point the Deputy made about our reliance on corporate tax, our reliance is why I have made the case for running budget surpluses and why we have set aside money in our two reserve funds. Maybe the Deputy might clarify her position on running budget surpluses and putting money into these funds. The question of reliance is why measures such as broadening our tax base through the changes we are making in carbon taxation continue to be essential.

Catherine Connolly (Galway West, Independent)
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I would be delighted to clarify my views on anything if I had a little more time. Specifically on the question, I am asking the Minister what analysis has been done and he is clarifying he is undertaking it and that it will be published in April. I understand the dilemma because there might be no tariffs tomorrow and it is all changing. We are dealing with a bully here.

I asked about the exposure of Ireland specifically. It is exposed for many reasons. One is that we are utterly reliant on one type of policy and approach. This has brought wealth to the country, but for a long time we have been warned that we must examine that, develop indigenous industry and consider other sources of employment. That is the part I am concerned about in the first instance.

I am also very concerned that our stand on Palestine, which I am proud of and which reflects the Minister’s words, will be used in this. We are setting up a consultative forum and an advisory panel because industry in America will have a major influence on policy. I do not expect the Minister to answer my question in the minute available, but I am anxious that we remain an independent, sovereign State and diversify our employment.

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy put a set of questions to me and I answered them. She wanted to know whether we are particularly exposed to changes happening in global trade, and I said we are and outlined why. She asked if there is an analysis under way to consider risks we face. I confirmed there is, told the Deputy when it would be complete and told her how it would be published. That work is all under way.

On the challenges we face because of potential shocks to global trade and what they could mean to our economy, we do have a very strong pillar in our economy created by foreign direct investment. We also have a thriving domestic economy, a non-traded economy, and a food sector that continues to bring great benefits to our society and economy. We will continue to support those pillars of our economy as well.

We are facing uncertain times, and on that I very much agree with the Deputy, but I do not see the magnitude of the uncertainty posing a threat to our sovereignty, as the Deputy has suggested. However, we will have choices and decisions to make.