Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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Yet again this week, we have seen statements by US President Donald Trump in relation to bruising and punishing tariffs on European economies and, by extension, Ireland. The debate around tariffs has gone back and forth. Deadlines have been postponed, not met. However, we would be foolish to dismiss the risks to Ireland. For workers in the sectors most at risk, it is not an exaggeration to say that they hear such headlines and wonder about the future of their jobs, livelihoods and futures. They are in sectors such as dairy, agrifood, drinks, aviation, life sciences, medtech, pharma, tech, financial services and many more that have a large exposure to the US. In my own county of Cork, tens of thousands of people are employed in life sciences, medtech and pharma.

While deadlines have been postponed in the past, there is no guarantee this will always be the case. The focus has to be on progress and achieving a deal to avoid the worst excesses of the potential of tariffs. Trade wars are bad for everyone. I do not believe they are in the interest of America or Europe, and the only way to win a trade war is to not be in one. We hope that cooler heads will prevail, but we must also have a clear eye. It may not come to pass, but we need to ensure we are prepared.

Sinn Féin has warned for some time that the policies of successive Governments have left Ireland uniquely vulnerable to a change in the economic climate and to tariffs. That is due to Fine Gael and Fianna Fáil’s failure to invest in infrastructure, excessive reliance on tax incentives and failure to build up our indigenous industry. Our energy, transport, water and housing infrastructure is far behind where it should be. We are in a housing crisis of historic proportions and have renewable energy companies redirecting resources to other markets because we are so slow to get off the mark. If tariffs come to pass and begin to bite, we will regret the failure of successive Irish Governments to address those issues.

The Government urgently needs to step up preparations for potential tariffs. The date of 1 August is two weeks away. The approach of the Government should include five key elements. We need to: ensure Irish interests in our key sectors are considered at the heart of the European Commission; diversify our trade because we are too reliant on too few markets; develop support schemes for businesses most affected; avoid tariff distortions between North and South; and, crucially, invest in infrastructure.

To expand on using our voice at European level, we need to ensure that any European negotiating policy has a clear eye to what Ireland’s greatest areas of exposure are. It appears as if whiskey and aviation are still on the EU retaliatory list. That is a concern. Whiskey has been hit time and again. It is an industry that has grown considerably in recent years, and potentially faces immediate risks in the event of further increases in tariffs. Aviation is also an area where there is a huge Irish profile and significant impacts for the industry here.

We need to diversify the markets we are trading with, with a view to future trade missions. While the US, Britain and Europe will always be our main trading partners for reasons of language, culture and so on, there is potential to deepen trade with countries such as Mexico, south-east Asia and other emerging markets.

What the Government has been talking about is not ambitious enough. For businesses, the Government needs to prepare export facilitation supports, language supports and energy supports and examine export credit insurance. We need to invest in our infrastructure, where there is a huge gap. In addition, we need to ensure that the potential for distortions between North and South are avoided and there is good co-ordination with the Executive in that regard.

Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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I thank the Deputy for his presentation. I concur, particularly with his opening piece on the vulnerabilities within Ireland. I disagree with him in the sense that he talked about the vulnerability. I sit on the trade forum established by the Tánaiste since the trade war, or the utterance of trade wars, began. All the Government agencies and State bodies, such as Fáilte Ireland and the IDA, as well as the IFA are around the table, working collaboratively in ensuring we are best prepared for whatever the future may hold. The vulnerability, in my humble opinion, is created by our geography more than anything else. We provide a gateway into Europe for all American companies in this land. We cannot change the geography but we can try to ensure that companies and businesses across this island are built with the resilience they need to cope with whatever we may face. That is certainly happening within the Government and with that collaboration piece I spoke about on the trade forum established by the Tánaiste.

It is clear that one of the most immediate and serious challenges facing European policymakers today is the fundamental upheaval in the international trading system. The events of recent months have upended the trading order as we knew it, driven by a fundamental shift in how the world's largest economy has decided to conduct its trade policy, which is something we have no control over.

Last weekend’s developments took place in that context. The letter from President Trump to President von der Leyen was deeply regrettable. A 30% tariff will have a significant effect on the Irish and wider European economies. It could be detrimental. However, the EU continues to negotiate with the US in good faith. The Deputy asked in his opening statement for cool heads. I think nothing else could be said of everybody around the European Union, given their cool, calm and reasonable approach against difficult headwinds. Notwithstanding the letter, the fact remains that the deadline for talks is 1 August. The EU is at the negotiating table and will remain there. Negotiations are at an advanced stage. Now is the time to redouble our efforts and seek to achieve positive results in the time available.

The Government will continue to seek to protect our indigenous Irish businesses and our multinational companies from tariffs. As the Deputy also said in his opening gambit, tariffs are not just harmful to Irish companies. They are hugely harmful to the American economy as well. The Tánaiste is in ongoing communication with Commissioner Šefčovič and this will continue as we approach the deadline of 1 August.

At the Foreign Affairs Council (Trade) on Monday, the Commissioner outlined what had been the EU’s strategy since the outset of this dispute, which was to continue negotiations while, at the same time, preparing rebalancing measures, should they be required. The Irish Government and other member states strongly support this approach. EU unity is our greatest strength in these negotiations.

The Commission has shared a revised list for a possible second set of countermeasures. No formal proposal has been presented to member states for consideration at this point. Officials are examining the list against our known sensitivities.

Tariffs imposed by either side will cause pain.

However, it is unfortunately already the case that Irish and EU exports to the US have faced additional tariffs since April. Let us remember that, to date, the EU has not imposed any tariffs on US goods and we do not want to, but we must be prepared to act if negotiations are unsuccessful. This is the sensible and measured approach.

Donnchadh Ó Laoghaire (Cork South-Central, Sinn Fein)
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I return to the issue of vulnerabilities. It may be the case that the issue of new tariffs has come onto the table since the election of President Trump for the second time. It has returned to the agenda. Sinn Féin and others in the Opposition have made the case for many years that, even aside from tariffs, Ireland is vulnerable to a change in the economic climate because of the economic model we have. It has failed to diversify into new markets, and we are now talking about different trade agreements. The EU already has many free trade agreements in areas where we have a limited economic profile, including south-east Asia, southern Africa and South America. There are areas where there is huge potential for further growth. There is also our failure to build up our indigenous economy and to properly support that. Our businesses domestically have some of the highest energy costs in Europe. From small to medium to big businesses, it is a huge drag on their potential to grow and to expand into potential new markets.

I have two particular questions. I will mention one market. While it is one of our traditional markets, an important question for Britain is the potential for an SPS agreement. Does the Minister of State have an update on that? More particularly, on the US, I understand the Tánaiste was due to meet the US ambassador yesterday. What was the outcome of those discussions? Is there any further update from those discussions on the US Administration's position? I understand also that the technical team, led by Maroš Šefčovič, was in Washington this week for a potential meeting with Secretary Lutnick, but certainly with senior officials in the US departments. Is it possible to get an update on the outcome of that meeting that has been relayed to the Irish Government?

Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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The Tánaiste and other Ministers have been vocal and constructive voices at the table to ensure the EU's approach remains measured and appropriate. The Government's constant and consistent position has been, and remains, that we need substantive, calm, measured and comprehensive dialogue with the United States. This is also the position of the EU. Our objective remains to reach agreement on a mutually beneficial deal that works for both sides. A negotiated outcome is the best way forward and we are in close, ongoing contact with our EU counterparts at political and official levels as we approach the 1 August deadline. In the remaining time, the Government will continue to advocate for a deal that works for Ireland, Europe and the US. However, let me be absolutely clear that tariffs are economically damaging for all sides. They disrupt complex and highly integrated supply chains that benefit businesses, workers and consumers on both sides of the Atlantic. We will continue to pursue dialogue, to make the case to remove these tariffs and to assert our interests through the EU and directly with the United States.

The Deputy has asked specific questions. I will try to get the information and revert with that. On market diversification, State bodies like the IDA and Enterprise Ireland are doing incredible work at the trade forum. Team Ireland is active on the ground in the United States. The diplomatic effort that is being made is not going unnoticed either.