Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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495. To ask the Minister for Finance his response to the imposition of new US tariffs on EU exports, particularly pharmaceuticals; if an assessment has been made of the impact on Ireland’s corporate tax receipts and foreign direct investment strategy; and if he will provide details of any measures to diversify Ireland’s tax base and reduce overdependence on a small number of multinational contributors. [44844/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The EU-US Joint Statement on Trade was published last month. While the imposition of tariffs is, of course, regrettable, this agreement represents an important milestone and provides a level of certainty and predictability about the future of transatlantic trade policy.

My Department and the ESRI published an analytical paper in March which modelled several tariff scenarios in order to assess their potential impact on the Irish economy. This analysis focused on assessing the overall macroeconomic impact of tariffs on the Irish economy, rather than potential sector-specific effects.

This research estimated that modified domestic demand – the most meaningful metric for the domestic economy – would be around 1-2 per cent below the no-tariff baseline over the medium-term depending on the scenario. The potential impact on GDP was estimated at around 2½ to almost 4 per cent below a no-tariff baseline. The analysis suggested that the impact on overall tax receipts would be broadly similar to the effects on the macroeconomy. However, it is important to note that the model does not fully take account of firm, product and sector-specific factors which can have a significant influence on activity in an Irish context.

My Department will publish updated macroeconomic and fiscal forecasts alongside the Budget in October. The forecasts will incorporate all available information including the estimated impact of the Framework Agreement between the EU and the US on the Irish economy.

In responding to the current challenging external environment, it is crucial that we focus on the factors that are within our control and influence. This includes further enhancing the competitiveness of the domestic economy to ensure that Ireland remains an attractive location for both foreign and indigenous investment. To this end, we will continue to invest in key strategic infrastructure and in education and skills.

We must also continue to build up our fiscal buffers, including through transfers to the Future Ireland Fund and the Infrastructure, Climate and Nature Fund.

In the meantime, we must also work to diversify our export markets. Indeed, the Tánaiste and Minister Burke recently launched the Government Action Plan on Market Diversification, designed to bolster Ireland’s global trade resilience.