Future foreign direct investment from the US could be at risk from a “more interventionist” industrial policy likely under a Trump administration, Minister for Finance Jack Chambers has warned.
In a statement released on Wednesday evening, Mr Chambers warned of the interventionist policy stance from the new Trump administration, with tariffs likely a “key policy instrument” which in turn would impact Irish exports and have “adverse implications” for the economy.
With the incoming administration having signalled that taxes on imports will be part of their economic policy, Mr Chambers said tariffs now “appear to be a key policy instrument for the new administration”.
This, he said, “would impact Irish exports and have adverse implications for our economy”.
Podcasts of 2024: 10 of the best shows from the past year, from Keep It Tight to Who Trolled Amber?
Samantha Barry: ‘There’s not a moment where I’m not representing Glamour. I don’t get to switch it off’
Biden grants largest single day clemency in US history as 1,500 sentences commuted
Bearing thrifts: Elon Musk targets Washington waste with his ‘naughty and nice list’
“A more interventionist industrial policy appears likely from the new administration and this might risk future waves of FDI which may not materialise,” he said.
While he did not explicitly warn that corporation tax receipts would be hit, he repeated previous warnings of a “concentration risk” arising from the fact that a small number of US multinationals are responsible for a significant portion of this revenue, which he described as “volatile”.
“That is why we must continue to run budgetary surpluses to protect the economic progress that has been achieved to date,” he said.
Mr Chambers said that the US presidential election, making the election of Mr Trump to a second term following his 2017-2021 first administration would have “far-reaching consequences”.
“Nowhere is this more true than in Ireland,” he said, citing historical, cultural and economic links with the US.
[ A Trump win is bad news for the Irish economy. The question is how bad?Opens in new window ]
“Put simply, the US is Ireland’s single-most important economic partner. Therefore, the economic policies pursued by the next US president will undoubtedly permeate through to the Irish economy.”
He reiterated comments by Coalition leaders that the Government would work with the incoming administration. He said the relationship would continue to be mutually beneficial with Ireland continuing to stress the benefits of multilateralism and two-way international trade and investment.
The Dublin West TD said the Government had been vindicated in establishing two long-term investment funds that will “establish fiscal buffers to protect Ireland’s economy in the future”.
“Leaving aside the outcome of the US election, it is clear that the global economic landscape is changing – trade and investment are increasingly taking place on the basis of geopolitics,” he said.
