As the EU braces for the announcement of tariffs by the Trump administration today, fears are growing in the Irish Government about possible EU retaliation against US tech companies based in Ireland.
The European Commission, which manages trade policy for the bloc, is understood to be preparing a range of possible responses to the US tariffs, including measures that target US tech firms and banks.
Senior Government sources acknowledge that the potential EU measures would cause difficulties for Ireland, which is home to many of the US tech companies’ European headquarters, and where they pay tax on much of their EU business.
The Government is understood to have pressed its concerns in Brussels, though sources said all EU countries are lobbying the commission to take their national interests into account when framing the bloc’s response to the tariffs.
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“Our view has always been: ‘don’t do things that are going to hurt us’,” a Government spokesman said about Dublin’s representations to the commission.
US president Donald Trump is set to proceed with his proclaimed “Liberation Day” by announcing sweeping tariffs that will take immediate effect.
White House press secretary Karoline Leavitt told reporters on Tuesday that Mr Trump was spending the day with his economic team fine-tuning the announcement. While she did not offer any specifics, she anticipated the measures would take effect instantly.
The scope and severity of the tariffs have been a closely guarded secret, and the general mystification has led to lurching market prices and widespread foreboding among US trading partners, including Ireland. The announcement has been scheduled to take place in the Rose Garden of the White House at 4pm EST (9pm Irish time).
European Commission president Ursula von der Leyen said the EU “holds a lot of cards” in any trade war. The expectation is that the commission will not announce any immediate retaliation but will rather signal potential future actions and call for negotiations with the US in the meantime.
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The commission is understood to be finalising plans to slap tariffs on more than €20 billion worth of US products and goods, such as soybeans, cosmetics, bourbon, motor boats and Harley Davidson motorbikes, in response to earlier US tariffs on steel and aluminium coming from the EU.
That package of tariffs will potentially be followed by another one in an effort to bring the US to the negotiating table, one commission source said.
Ireland and other states such as France have been lobbying against tariffs on imports of US bourbon for fear exports of Irish whiskey and French wine and champagne will be hit in retaliation, as Mr Trump has signalled the US would do.
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The Government is anticipating blanket tariffs of about 20 per cent to apply to Irish exports to the US. Tariffs at this level would be a blow to exporters in the food, drink and pharma sectors in particular and, if maintained, would have a significant impact on the wider economy. Further specific tariffs against pharma – by far Ireland’s biggest export to the US – are also promised but may come at a later date.
A string of economic studies have shown that Ireland is the EU state most exposed in the event of such as trade war.
A particular concern in Dublin is that the EU could decide to hit the activities of big US tech companies operating in the US. The commission has wide powers under the so-called anti-coercion instrument to take far-reaching measures against these companies.
