Taoiseach Simon Harris is gearing up for significant economic changes as the possibility of Donald Trump’s second presidency looms large over Ireland. During his recent Sky News interview, Harris discussed the potential fallout for Ireland's economy if Trump follows through with his promises around tariffs and trade reforms.
With the GOP's 2024 "Make America Great Again" agenda promoting trade rebalancing, the notion of imposing tariffs on foreign goods has sparked considerable concern. The platform suggests: "as tariffs on foreign producers go up, taxes on American workers, families, and businesses can come down." Nevertheless, economists have long cautioned about the repercussions of such tariffs, highlighting how they can inflate consumer prices, leaving everyday Americans to shoulder the costs.
While addressing these pressing issues on Sunday, November 25, Harris affirmed his belief in Trump’s sincerity about his trade policies, pointing out the substantial mandate Trump secured from voters. Recognizing the unique positioning of Ireland—especially with its access to the European Union—Harris stated, "Ireland can approach this with confidence. There are many reasons firms locate in Ireland, including our access to the European Union. But also, we can never be complacent." His plan includes proactively setting aside significant funds to cushion against any possible economic shocks.
Underscoring the urgency of the situation as the country prepares for its General Election, Harris remarked, "I think President Trump has received a very large mandate." He indicated the importance of recognizing the changes Trump’s policy direction could bring, particularly with his choice of cabinet members potentially steering trade policy toward isolationist practices. Harris added, "The second Trump presidency may not be comparable to the first for a variety of reasons."
Throughout the election period, Harris has been vocal about the need to prepare Ireland for any potential trade dynamics connected to the U.S. He’s been working closely with EU counterparts to strategize responses and secure Ireland's economic stability.
One key initiative is the Future Ireland Fund, which aims at protecting the economy against unforeseen fiscal disturbances related to trade shifts under Trump. This fund started accumulating resources last July, following the government's commitment to set aside billions annually. Each year, from 2024 to 2035, 0.8 percent of Ireland's GDP will be allocated to the fund, which could balloon to around €100 billion by 2040, considering growth and returns on investments. The first annual transfer of roughly €4.05 billion was completed by Minister for Finance Jack Chambers recently, marking the initial step toward building this financial buffer.
Currently, Harris and his colleagues are focused on convincing both U.S. and Irish businesses about the advantages of maintaining strong trade relations. Harris emphasized, "We will be making the point frustrations don’t always have to be directed at trade with Ireland. Irish companies are creating jobs throughout the U.S., demonstrating mutually beneficial connections. This trade is advantageous not just for the EU and Ireland but also for Trump’s base voters."
Despite the challenges posed by the potential economic changes following Trump's second term, Harris has expressed confidence it won’t deter Ireland from its long-term economic goals. The road may be rocky, but with careful planning and resource allocation, the Taoiseach believes Ireland can weather the storm. It’s about keeping the lines of communication open and ensuring the American marketplace remains accessible and beneficial for Irish firms.
