Pearse Doherty (Donegal, Sinn Fein)
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58. To ask the Minister for Finance to outline the potential economic impact of reciprocal EU counter tariffs; and if he will make a statement on the matter. [16305/25]

Pearse Doherty (Donegal, Sinn Fein)
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70. To ask the Minister for Finance to outline economic growth projections set out under each tariff scenario in the joint paper by his Department and the ESRI; and if he will make a statement on the matter. [16306/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 58 and 70 together.

To better understand the potential impact of tariffs on the Irish economy, my Department and the ESRI recently published an analytical paper where several tariff scenarios were modelled. Each of the scenarios detailed below is based on the assumption that any tariffs imposed are maintained permanently.

In a scenario where the US unilaterally imposes 25 per cent tariffs on imports from the EU, Modified Domestic Demand (MDD) in Ireland is expected to fall by approximately 1¼ per cent relative to a no-tariff baseline over the medium term. If the EU responds with reciprocal tariffs, then the impact is expected to be 1¾ per cent. In other words, the EU response lowers MDD by around an additional ½ per cent.

The impact of tariffs on GDP is more significant, falling by 2¾ per cent in the scenario with US unilateral tariffs, and 3¾ per cent in the scenario with reciprocal tariffs. This reflects the greater sensitivity of GDP to fluctuations in the external environment.

Similarly, if the US were to impose tariffs of 10 per cent on all imports from the rest of the world, MDD would be expected to fall by approximately 1¼ per cent over the medium term, compared to a no-tariff baseline. The introduction of reciprocal tariffs by the rest of the world would mean that MDD falls by 1¾ per cent.

Once again, the impact of tariffs on GDP is more significant. Irish GDP falls by 2½ per cent in the case of unilateral tariffs, while the introduction of equivalent tariffs by the rest of the world leads to a decline in GDP of 3¼ per cent relative to baseline over the medium-term.