Tariffs on US imports into the European Union will be designed to “do the least harm” to the economy, Paschal Donohoe has promised.
Goods imported from the EU into the United States are now subject to a 20% tariff and next week the bloc will announce retaliatory measures.
US President Donald Trump has said tariffs are necessary because America’s trade deficits have “led to the hollowing out of our manufacturing base; inhibited our ability to scale advanced domestic manufacturing capacity; undermined critical supply chains”.
On The Pat Kenny Show, the Minister for Finance reiterated the change will inevitably mean lower profit margins for Irish exporters.
“It will now mean that Kerrygold is more expensive versus a competitor butter product that is developed within America,” he said.
“It will then affect the profitability of the company that is selling that good into America.
“Because there tends to be great reluctance for the consumer to pay that higher tariff.”
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— Donald J. Trump (@realDonaldTrump) April 7, 2025
Minister Donohoe added that some companies might try to weather the storm by cutting their prices.
“Some manufacturers will say they’re willing to make less profit for a period of time,” he said.
“The reason why they would want to do that is to avoid the price of their goods going up in America and lead to them selling less.
“There are some signs at the moment that some sectors in the global economy are aiming to do that.”
— Donald J. Trump (@realDonaldTrump) April 2, 2025
The final list of US imports which will be subjected to EU tariffs has been the subject of intensive lobbying between EU capitals over the past few days.
“What you want to do then is apply tariffs to goods that are coming into Europe that do the least harm to the European economy,” Minister Donohoe said.
“That is why we are doing two things; firstly, we are applying tariffs to goods that are coming in for which there may well be European substitutes available.
“Secondly, by going on particular parts of the economy, as opposed to a global response and applying tariffs to everything, we’re trying to avoid the kind of escalatory dynamic that we’re seeing happening elsewhere.
“We want to deliver this outcome via negotiation as opposed to a permanent trade war.”
— Donald J. Trump (@realDonaldTrump) April 2, 2025
Many countries are concerned that Mr Trump will respond by further increasing tariffs on EU imports.
After Beijing responded to Washington’s tariffs by imposing its own 34% tariff on US imports, Mr Trump announced that Chinese goods would be subjected to a 104% tariff.
Main image: Minister Paschal Donohoe. Picture by: PA Images / Alamy Stock Photo.
