One-off payments for businesses ‘not sustainable’ response to tariffs – minister

One-off payments for businesses are not a “sustainable” response to 15% tariffs imposed by the US, the enterprise minister has said.

Peter Burke said that assisting companies in Ireland in a similar way to Brexit and Covid-19 funds would not be appropriate, as the trading world had changed.

The Irish government has welcomed the certainty of a trade deal between the EU and the US but said more detail is required to assess the impact on the Irish economy.

Taoiseach Micheal Martin said nobody was welcoming 15% tariffs “with open arms” but the deal avoided a “ruinous” trade war.

Speaking before briefing Cabinet on the trade agreement struck by US President Donald Trump and European Commission President Ursula von der Leyen at the weekend, Mr Burke said Brexit-style supports were not the answer.

“This is a new environment. It is a new trading world. There are huge tensions now on the geopolitical landscape, and that looks like it’s going to remain into the future,” he said.

“So we have to try and navigate those sustainably and the answer is not really setting up a Brexit-type response right now, it is working specifically with companies, trying to assist them, like we have been, in a sustainable way.

“One-off payments are not sustainable and I think we have to be honest about that. What is sustainable is that if you make your production process more efficient, that allows you to retain that high-value market despite the tariff rate with the US economy.

“I think one of the key things we’re looking to establish is that there’s no stacking in tariffs, and that could be a significant win, if it’s fleshed out correctly as we think it is, that you won’t have a 15% on top of previous tariffs, particularly in our agrifoods and drinks sector. It will be important to see what the carve-outs are in that sector.”

He added: “We know from butter, for example, and other products that are exported, particularly in the agrifood sector, they have 17% plus additional tariffs on them currently.

“So if they are not stacked, it potentially could be advantageous to that sector. But again, this is very much all in the air.

“We haven’t seen the detail of it, and until we see the clear detail, we won’t be able to make a clear determination.”

He said a “tariff response team” in Enterprise Ireland had been set up, representing around 950 companies that export to the US and around 68,000 jobs in Ireland.

He said there had been 174 drawdowns of the strategic consultancy grant since June.

He also said a Market Discovery Fund had been established to find out other trading options in 41 trade agreements the EU has across 172 countries.

He said that while some clarity had been found in certain areas, they were awaiting details of what the trade deal means for semiconductors and life sciences.

“I do think that potentially there’s good room for the agrifood sector and our drinks sector, because our drinks are location specific. And obviously it will be important that that will be recognised in any deal, because it’s an important market and for the Irish economy.

“We have our life science strategy coming through later on this year that will underwrite the support for the sector, as well as our competitive action plan, which will be published on the first week of September again, that will go into where we need to make our economy more efficient.”