LAST UPDATE | 8 Apr

THE PUBLIC EXPENDITURE minister has not ruled out a potential global recession and said that Ireland is “subject to all economic headwinds” in the near future as a result of the fallout from US tariffs.

Speaking on RTÉ’s Prime Time this evening, Fianna Fáil’s Jack Chambers did not specifically rule out a recession when asked about recent analysis by JP Morgan which projected that an economic slump is likely to happen later this year.

While discussing the potential impacts of further tariffs from the US President Donald Trump in response to European countermeasures, Chambers said if there is “an enormous economic shock, that will have a serious impact on the Irish economy”.

Chambers said he and finance minister Paschal Donohoe will produce an economic projection for the year later this month and stressed that “downside” effects and risks are impacting the economy.

He said that the Irish economy is one of the most exposed economies in Europe, in the context of US tariffs. The amount of Irish exports to the US are significantly higher when compared to other European countries.

Pressed on whether he would rule out a recession, Chambers said: “Ireland is absolutely subject to global economic headwinds. And if there’s an enormous global economic shock that will have a serious impact on the Irish economy, particularly reflecting on the openness that we have at the center of the Irish economy.”

Earlier in the programme, the minister stressed that the EU is seeking to negotiate with the Trump administration in Washington in order to avoid the necessity for counter tariffs, following the US’ decision last week to issue 20% duties on EU member states.

Chambers told the programme that the European Commission President Ursula von der Leyen has “prioritised creating the space to have an engagement”.

“Commissioner [Maros] Sefcovic, who coordinates trade, has been engaging with [US Commerce] Secretary Lutnick and we want to create that space,” he added.

Businesses will be protected in EU response

Whiskey, wine and dairy products were left out of The European Commission’s countermeasures that include tariffs on 99 items in response to the US’ announcement to issue 25% duties on steel and aluminum imports from Europe last month.

European leaders will vote on the tariffs on the US tomorrow which, if approved, will be imposed on 15 April. Following intense lobbying, whiskey, dairy and other products core to the Irish economy were not included. 

The tariffs are not in response to the 20% tariffs issued on the EU by Trump last week, which have sent international stock markets into freefall, as negotiations on those duties continue.

Chambers tonight was asked whether it is likely that whiskey, tech companies or dairy products will be subjected to future EU counter tariffs following their exclusion from the bloc’s initial response.

It is feared that targeting US bourbon would result in Trump responding with potentially drastic tariffs on European alcohol.

“This is the first iteration in a long, complicated and ever changing process,” the minister said, adding that the Irish government will continue to lobby the EU in order to discourage them from issuing tariffs on those products.

He said that he would “not take any optimism”, based on the events of last week, to suggest that the US would pull its punches when deciding to issue tariffs on European alcohol or other core sectors such as technology.

Chambers said, however, that the EU’s response to Trump’s global tariff list last week will try to protect core European sectors in order to avoid negative effects in the future. 

US stocks dive after another day

US stocks dived today, after a second day of stunning reversals. Wall Street veered from jubilation in the morning towards fear at the close over Trump’s trade war, which is scheduled to kick into a higher gear after midnight in Washington.

After roaring to an early gain of 4.1%, which had it on track for its best day in years, the S&P 500 quickly lost all of it within a few hours. It then careened all the way to a loss of 2.6%.

That brought it 19.7% below its record set in February.

The Dow Jones Industrial Average was down 683 points, or 1.8%, after giving up an earlier surge of 1,460 points, while the Nasdaq composite was down 3.2%, as of 3.39pm Eastern time (8.39pm Irish time).

The shocking swings followed rallies for stocks globally earlier in the day, with indexes up 6% in Tokyo, 2.5% in Paris and 1.6% in Shanghai.

Includes reporting by Press Association