A Government analysis on the impact of Donald Trump’s proposed tariffs warned of a decline in GDP of up to 4% and a decline in employment by more than 3%.<\/p>\n
The research modelled multiple possibilities including unilateral tariffs, a trade war with the European Union, or a wider trade war.<\/p>\n
It said every single scenario would have “significant negative implications” for the Irish economy.<\/p>\n
The unpublished analysis said GDP could be expected to fall by between 2.75% and 4% over the medium term.<\/p>\n
The employment decline would be between 2.5% and 3.25% while domestic demand would drop between 1.75% and 2.5%.<\/p>\n
It also warned of price level increases of between 2-3% and said the modelling may underestimate the actual impact.<\/p>\n
The research said of the models: “They do not fully account for several important indirect channels. Scenarios focus exclusively on the potential impact of tariffs”.<\/p>\n
“The results do not incorporate the potential impact of broader measures such as changes to the US tax code to encourage the reshoring of investment,” it added.<\/p>\n
The analysis was prepared within the Department of Enterprise, Trade and Employment as they geared up for a second Trump presidency.<\/p>\n
It said Ireland’s dependence on corporation tax made the country particularly vulnerable to changes in tax policy in the US.<\/p>\n
The paper warned of “undertaxed profits” in the US being collected from group subsidiaries in other jurisdictions.<\/p>\n
“Broader measures, such as Technical Services Withholding Taxes, pose a threat to Ireland’s tax base as they could target a significant amount of outbound payments for services,” it said.<\/p>\n
Ireland was more exposed than other countries in Europe when it came to exports to the US, the paper explained.<\/p>\n
“The impact on total trade flows to and from the US is approximately three times larger for Ireland compared to the overall EU impact – due to the much higher share of trade accounted for by the US in Ireland,” it added.<\/p>\n
The analysis said between 110,000 and 160,000 workers were in sectors classed as having “significant” or “high” exposure to US trade.<\/p>\n
The paper said this represented between 3.9% and 5.7% of total employment in the State, rising to 12-14% when services trade was included.<\/p>\n
The most exposed goods sectors included pharma, tobacco, organic chemicals, professional and scientific apparatus, and beverages.<\/p>\n
The analysis added that US firms operating in Ireland employed 178,000 people in 2023, including more than 93,000 in ICT and almost 20,000 in pharmaceuticals.<\/p>\n
It said US companies had Irish payroll costs of \u20ac16.1 billion in 2022, with an average payroll cost of \u20ac79,100 per worker.<\/p>\n
Reporting by Ken Foxe<\/p>\n","protected":false},"excerpt":{"rendered":"A Government analysis on the impact of Donald Trump’s proposed tariffs warned of a decline in GDP of…\n","protected":false},"author":2,"featured_media":494367,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-494366","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/494366","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=494366"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/494366\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/494367"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=494366"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=494366"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=494366"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}