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Investigates Investigates Money Diaries Daft.ie Property Magazine Allianz Home Magazine The 42 Sports Magazine The Journal TV Climate Crisis Cost of Living Road Safety Newsletters Temperature Check Inside the Newsroom The Journal Investigates The Explainer A deep dive into one big news story Sport meets news, current affairs, society & pop culture have your say Or create a free account to join the discussion Advertisement More Stories L-R: Foreign Affairs Minister Simon Harris, US President Donald Trump, President of the European Commission Ursula von der Leyen.Alamy Multinationals Trump pauses threatened EU tariffs as new report warns tariffs are biggest threat to Irish economy On Friday, US President Donald Trump threatened the EU with a 50% tariff from 1 June, casting further uncertainty over the fate of Ireland’s economy. 7.01am, 26 May 2025 Share options LAST UPDATE 28 mins ago US PRESIDENT DONALD Trump has said he will pause his threatened 50% tariffs on the European Union until 9 July, after a “very nice call” with EU chief Ursula von der Leyen. Trump had threatened on Friday to invoke the steep tariffs as soon as 1 June, saying talks with the EU over his previous levies were “going nowhere.” He also threatened to place a 25% tariff on tech giant Apple, which has its European headquarters in Cork, in order to move iPhone production to the US. Von der Leyen “just called me… and she asked for an extension on the 1 June date, and she said she wants to get down to serious negotiation,” Trump told reporters before boarding Air Force One in New Jersey. “And I agreed to do that,” he added. Von der Leyen had earlier said on X that she held a “good call” with Trump, but that “to reach a good deal, we would need the time until 9 July.” Good call with @POTUS. The EU and US share the world’s most consequential and close trade relationship. Europe is ready to advance talks swiftly and decisively. To reach a good deal, we would need the time until July 9.— Ursula von der Leyen (@vonderleyen) May 25, 2025 The US leader said Friday he was “not looking for a deal” with the EU, repeating his oft-stated view that the bloc was created to “take advantage” of the United States. Trump has hit the bloc with three sets of tariffs: 25% on steel and aluminium and on automobiles, followed by a 20% “reciprocal” levy on all imports – which has been suspended pending talks, though a baseline 10% remains in force. The EU had announced plans to hit US goods worth nearly €100 billion with tariffs if negotiations fail to produce a deal. Olof Gill, the European Commissions spokesperson for Economic Security, Trade and Financial Services, told RTÉ’s Morning Ireland if there is “chaos, it’s not on this side of the Atlantic”. He said the EU has been “ready to negotiate with the US for several months”. “If the statement by President Trump yesterday evening means that we’re now finally going to get down to brass tacks, we welcome that.” While Gill said both sides are “quite far apart”, he added that “it’s not an unbridgeable distance”. He added: “We’re just trying to move beyond the noise and focus on the details. “We’ve presented to our American counterparts what we believe is a very good basis for negotiation, where both sides can derive benefit. “We just want to ignore all the bluster and noise going on in the background – we’re ready to talk and that has always been the case.” ‘Could Ireland weather a tariff shock?’ Trump’s tariff pause on the EU comes as AIB cautioned that Ireland’s economic growth is expected to slow across this year and 2026 as a result of global uncertainty over tariffs and trade tensions. Advertisement AIB’s Economic Outlook Report which has been released today examined Ireland’s current economic status and its population’s spending, as well as external factors – such as the threat of tariffs – that could have a dire impact on the country’s economy. The theme for the report was: “Could Ireland weather a tariff and Foreign Direct Investment (FDI) shock? – A balance sheet perspective”. Gill said this morning that “Ireland is one of the most exposed to this situation and that’s very well recognised at the highest levels of policy making in the EU”. The AIB report found that the economy has built up enough resilience to withstand potential shocks in the short term. “However, permanent tariffs or changes to the US tax code which would reduce Ireland’s FDI attractiveness, would pose a greater longer-term challenge,” the report stated. Such a scenario would force Ireland to look to non-US markets for trade, a review of the country’s industrial model, fostering Irish enterprises and a boost in competitiveness to maintain a healthy economy, the AIB report stated. Irish modified domestic demand – different to total domestic demand (TDD) as large transactions of foreign corporations that do not have a big impact on the domestic economy – is forecast to grow by 2.3% this year, 2% in 2026 and 2.6% in 2027. The Central Statistics Office describes modified domestic demand as “a smaller number than GDP [due to the above exclusion] and it more truly reflects how Households, Government and domestic Corporations in Ireland are doing.” Consumer spending and business investment growth in Ireland are expected to cool this year due to “international volatility”. “US tariffs and future US tax policy are the main downside risks to the Irish economy,” the report said. While agricultural exports are exposed to the tariffs, the “key risk” centres on ireland’s multinational-dominated sectors. These sectors account for around 12% of total employment and are responsible for 50% of Ireland’s GDP, as well as around 80% of exports. ”There is a heightened risk of tariffs on the Irish pharma sector, which, along with technology services, dominates multinational sector output. “Any negative spillovers from the multinational sector could hit domestic sector output and employment. “However, the key medium-term risk to the Irish economy is the concentration of our taxation base in corporation and income taxes sourced from the multinational sector.” Irish households are expected to reduce their spending while some business sectors may delay planned investments. The economic risks are accompanied by a balance sheet resilience, mitigating some concern. While the labour market “will continue to grow”, employment growth is forecast to slow from 2.7% last year to 2% this year, 1.5% next year (2026), and then 1.8% in 2027. AIB Chief Economist David McNamara said of the reports findings: “The uncertainty created by the dramatic shift in US trade policy and the responses of other key trading blocs, is expected to dampen global growth in 2025 and 2026. “Nonetheless, Ireland enters this period of uncertainty from a position of strength, with the economy growing at a robust pace in recent months, while both the public and private sectors have built up material financial buffers in recent years.” Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. 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