Pearse Doherty (Donegal, Sinn Fein)
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1. To ask the Minister for Finance to outline the potential impact on employment and tax revenues from possible US tariffs; and if he will make a statement on the matter. [16502/25]

Pearse Doherty (Donegal, Sinn Fein)
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This question relates to the potential impact on unemployment and tax revenues as a result of the announcement of US tariffs. We heard what Donald Trump had to say last night, with 20% tariffs being imposed on this State. Pharmaceuticals will not be the subject of a tariff, although we hold our breath in relation to that. We have the Economic and Social Research Institute, ESRI, and Department of Finance modelling on 25% tariffs and a reciprocal tariff from the EU and their impact in the context of job losses and potential income from taxation. Has any early work been done on what these tariffs will look like when it comes jobs? In all circumstances, the analysis shows that employment will continue to grow, even on the basis of the 25% tariff scenario. The modelling to which I refer estimates that the impact on the public finances would be approximately €500 million. Given what was announced yesterday, it appears that the impact will be somewhat less. Will the Minister elaborate on this matter?

Paschal Donohoe (Dublin Central, Fine Gael)
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Before I get into the important specifics the Deputy raised, I will reflect on the announcements relating to the tariffs introduced by the Trump Administration. Free trade has been at the centre of the Irish and European economies for many decades. However, it is clear that the global economic landscape has changed. Tariffs are being imposed in respect of trade into the United States at a level that is historically high. We are moving into a trading and economic world that will change. This will have consequences for the Irish economy and the global economy.

To better calibrate how we respond to these unprecedented challenges, we must first aim to understand their potential impact. To that end, my Department and the ESRI recently published an analytical paper where several tariff scenarios were modelled. The analysis showed that modified domestic demand, which is the most meaningful way of measuring our economy from a jobs and income point of view, would be 1% to 2% below its non-tariff baseline over the medium term, depending on the extent of tariffs.

The potential impact on GDP is greater, between 2.5% and almost 4%, although changes in GDP have less impact on the ground. From an employment perspective, we assume it would be around 2% to 3% lower compared with the non-tariff baseline. In that context, we are talking about 55,000 to 85,000 jobs that either might not be created or could be lost or affected due to these measures.

To go back to Deputy Doherty's specific question, given that the position relating to tariffs only became clear last night, the global response is not yet clear. What we will do is begin modelling in respect of what we know. The Government will aim to publish that modelling in the annual progress report that is due to take the place of the stability programme update. We are aiming to do that in the coming weeks.

Pearse Doherty (Donegal, Sinn Fein)
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Given that the ESRI and the Department of Finance have worked out these models, I put it to the Minister that we should very quickly have information on the 20% scenario outlined by the Trump Administration last night. The analysis done by the ESRI and the Department of Finance examined the potential impact of a US Administration tariff and gave us the numbers for it. They also looked at the impact of countermeasures from Europe. These are still unknown, but different scenarios were assumed. In all circumstances, in the context of jobs, public finances, tax, the economy and businesses, it was shown that countermeasures from the European Union would have a significant impact on Ireland.

On modified domestic demand, the analysis carried out was based on a 25% tariff. The Minister referred to it decreasing by 1% to 2% from the baseline. Am I right in saying that we would still see growth right throughout the four-year period that has been assessed? In other words, modified domestic demand and GDP will continue to grow in all scenarios. Indeed, employment would also continue to grow, despite it being reduction from what would be the case in a non-tariff scenario.

Paschal Donohoe (Dublin Central, Fine Gael)
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Based on the papers published and the analysis we have done, the answer, which is subject to a number of assumptions, is that the Deputy is broadly correct. The issue is what happens to the assumptions. The assumptions in the paper in question assume that investment levels will be stable in our economy. The question is whether the assumption relating to the decisions made, their impact on the global economy and the ability of American companies to invest elsewhere will hold in the time ahead. The second assumption in the paper relates to the fact that we could not at that point identify the impact of sectoral-specific measures and what that impact might do to individual companies or groups of companies in our economy. I have been making the point that on the basis of what we know, we are moving into a scenario of lower growth and lower employment growth. However, I have been equally clear that there are other scenarios that could effect that. This is why, in the time ahead, it is critical that we look at how we can negotiate with the US to see if we can avoid the darker and more damaging scenarios coming to pass.

Pearse Doherty (Donegal, Sinn Fein)
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The key here is negotiation and de-escalation. We need to get to a point where sensible and cool heads prevail. What happened yesterday was an act of economic sabotage by the US Administration in respect of its own economy. What was done will push up prices for American consumers. Obviously, the analysis was based on a 25% tariff, which was more severe than what we have seen, particularly as a tariff of 20% on pharma has been excluded at this point. This would probably allow for GDP growth of approximately 2% to 2.5% in the next number of years, which would be positive. Would that be correct?

In the context of EU countermeasures, I am deeply concerned that we could have a scenario where, as the ESRI and the Department have indicated, countermeasures will impact on jobs, economic growth and the public finances and will obviously push up prices for consumers. What is the Minister's concern in this regard and in the context of the fact that EU countermeasures could give rise to a proper trade war? The US Administration has adopted a unilateral position. We need to get into dialogue with the US Administration in order to try to de-escalate matters and get it to reverse its decision. We have to be careful that we do not step into a trade war.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am struck by the value the Deputy places on negotiation and dialogue, particularly as his party made clear it would not go to the Oval Office. The Deputy's party leader and the First Minister of Northern Ireland indicated they would not engage with the United States across the St. Patrick's Day programme.

Pearse Doherty (Donegal, Sinn Fein)
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Not true.

Paschal Donohoe (Dublin Central, Fine Gael)
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That is the case.

Pearse Doherty (Donegal, Sinn Fein)
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She was on a trade mission there the week before.

Paschal Donohoe (Dublin Central, Fine Gael)
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Given that his party made clear it would not engage politically with the Trump Administration, why is he advocating the benefits of negotiation? Why is he making the case for the benefits of dialogue? I welcome the fact he was doing so, but how is that consistent with the announcement his party made, to some fanfare and prominence, that it did not want to engage with the political Administration and leadership of the United States of America? With regard to the narrative he is developing here, if he does want to see negotiation happening, how does he believe that negotiation could be successful in the absence of the European Union being willing to either consider or implement measures to respond to what the US has done?

Pearse Doherty (Donegal, Sinn Fein)
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It is interesting that the Minister would not answer my question on support for tariffs that will lead to prices for Irish consumers increasing. For his information, Michelle O'Neill was on a trade mission to the US in the week before St. Patrick's Day. We will continue to use our influence. If Deputy Donohoe, as Minister for Finance, wants to score political points on this serious issue, that is disappointing, particularly in light of what we are facing.