US president-elect Donald Trump is a “somewhat transactional” politician who should understand trade between the US and Europe was a “two-way relationship”, Taoiseach Simon Harris has said.
During the presidential campaign Mr Trump promised to impose tariffs of 10 to 20 per cent on all goods coming into the US from Europe and elsewhere, a threat which would hit Ireland particularly hard if he follows through.
Speaking on Thursday during a visit to Budapest for meetings of European leaders, Mr Harris said the Republican Party candidate had beaten Democratic candidate Kamala Harris to win the US election “decisively” this week.
He noted Ireland and the European Union had worked with Mr Trump during his first term in the White House, he said.
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“President Trump is a businessman, he is somewhat transactional. I think he will understand that the relationship in terms of trade is a two-way relationship,” he said. “We do need to be aware that the risk of a transatlantic trade shock has now increased. I think that is a statement of fact. We need to engage with the new administration at a European level.
“It is important in the days, weeks and months ahead we assess what president Trump may do versus the various policies that he has outlined,” he said.
The Fine Gael leader said he believed the Government had sought to arrange a phone call with the incoming US president. “I hope to be in a position to speak to president-elect Trump and congratulate him,” he said.
[ Trump’s return could pose a threat to Irish economy, Ministers are warnedOpens in new window ]
Mr Harris said he did not expect there to be any exodus of US multinational companies from Ireland if Mr Trump slashes the US corporate tax rate to tempt businesses back, as he had promised on the campaign trail.
“Companies locate in countries for many reasons, not just tax, and at the end of the day I think Trump will understand this as a businessman too, the European Union is a major market and a major opportunity for the US to do business,” he said.
Ireland’s low corporate tax rate was only one reason it was attractive to overseas companies, he said. The country also had a big pool of talent and served as a gateway into the EU market.
[ Donald Trump’s openly authoritarian instincts are about to be unleashedOpens in new window ]
The Government had run budget surpluses and put money away into funds for the future, to guard against any shocks to the Irish and European economy, Mr Harris said. “We’ve been often excoriated as a Government and my own political party, for making those decisions by political opponents, I think those decisions seem even more wise today then they did last week,” he said.
Mr Harris was speaking on his way into a meeting of about 40 leaders from European countries in Budapest, which will be followed by a summit of EU leaders. When he returns to Ireland on Friday afternoon, he has said he intends to call a general election, with the polling date expected to be on November 29th.
The election of Mr Trump has also sparked concerns about the possible impacts on US support for Ukraine. Mr Trump has indicated he would end Ukraine war in a day, possibly by threatening to withdraw military and financial support for Kyiv, forcing Ukraine to give up territory to Russia in a settlement.
While the Irish position on military neutrality was “not up for discussion”, Europe had to stand with Ukraine for “as long as it takes,” Mr Harris said. “Ireland does need to be aware that we are not immune to the threats that exist in Europe ... There will be a need to invest more in defence.”
The “very significant plans” of US president-elect Donald Trump for the US economy could affect not only Ireland but also the global economy, Minister for Public Expenditure Paschal Donohoe said on Thursday.
Mr Donohoe said he had been saying for many years there was a need for the State to produce a budgetary surplus each year to prepare for the risk of financial shocks.
“This money will be absolutely vital to helping us deal with any changes that could occur in the years ahead due to changes in global trade and in global taxation. For that reason, it underpins the need to continue to bond budget surpluses in the future,” said Mr Donohoe.
The Minister said he would challenge those who argued that that surplus money, including the Apple fund, be spent now.
He asked if the money was spent “how then would we be able to provide the insurance policies that Ireland will need in the years ahead”.
He said: “If any other political parties are saying they want to spend all of those surpluses, they need to explain to the Irish people why they’re so confident those surpluses will be there given the change that is now happening in America and elsewhere.”
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