Gavan Reilly: Cabinet’s big job is getting 27 voices on one hymn sheet
The hot air and drama of the Dáíl on Tuesday might be dominated by debate on the future of the Ceann Comhairle, but the biggest news of the week happens in a deceptively small room on another continent. The tariff announcements from the Oval Office this Wednesday are the single most consequential thing to happen to this country since Covid.
As far as tariffs on the EU go, there will be one set of measures, but they will affect 27 different governments in different ways. For Ireland, that’s where things get tricky.
Brussels does not want to rush into a hasty reply, and prefers to do things by consensus. But other targets of the new American tariffs might be much more likely to act quickly: we’ve seen in recent weeks how, for example, disputes between America and Canada resulted in new tariffs being announced (and then withdrawn) with literally only a few hours’ notice.
And on tariffs, time is money: if America makes it more expensive to buy European alcohol, there will be a necessity to act quickly, or else American producers will have the luxury of an even playing field in Europe and a significant competitive advantage in their home country.
Finding some kind of consensus among the 27 European governments – achieving the goal of maximum disruption to the United States, and minimal harm to European households – might well be easier said than done. And Ireland, as a relatively small economy in the grand Continental scale of things, could well find it difficult to protect its own domestic interests when faced with competing demands from other larger blocks.
In fact, there is a good chance that Ireland could be hit on the double – with the possibility of tariffs levied on all EU goods exports, irrespective of sector, and separately new charges being placed specifically on pharmaceuticals.
That would be a worst case scenario for us. It’s hard to reconcile the two sets of figures, but the CSO estimates that Ireland exported €44.4 billion worth of medicinal products to the United States in 2024. Eurostat, meanwhile, believes that European exports as a whole to the United States are worth about €550 billion a year.
In other words, for every €12 of European produce bought in America, €1 is an Irish pharmaceutical product. It’s an astonishing figure which illustrates just what’s at stake.
When you understand this, you understand why Simon Harris spent so much of the last week in a series of whistle stop meetings with counterparts from other member states - it is exceptionally vital that, when you’re has to start deciding what products it will place its own tariffs on, Ireland has already put its stake in the ground.
Interestingly, your columnist couldn’t help but notice one declaration from Mícheál Martin in a series of media engagements on Monday morning. Asked about the impact of a trade war on Ireland’s budget, the Taoiseach naturally would not be drawn on which priorities (more welfare? Lower taxes? Cuts to VAT? Spending on public services?) might have to give way, and which policies could have to be parked - except for one.
Martin said the top priority would be infrastructure: more robust water and energy networks, and better connectivity, would help the country stay competitive in the event of a crash.
At least some lessons from 2010 have been remembered…
Gavan Reilly is Political Correspondent with Virgin Media News and Political Columnist with the Meath Chronicle. Column appears first in Tuesday's paper!