Ireland must not repeat austerity mistakes after US tariffs, opposition TDs say

The Irish Government must not repeat past mistakes in how it responds to US tariffs expected to be announced by Donald Trump, opposition TDs have said.

Labour and the Social Democrats cautioned against austerity and pulling back from investing in the public sector ahead of the threat of an economic shock from a major US tariff announcement.

Government figures have expressed deep concern over how exposed Ireland is to possible double-digit US tariffs on exports.

US President Donald Trump and his commerce secretary Howard Lutnick have both suggested US pharmaceutical multinationals located in Ireland will be targeted in tariffs to be announced on Wednesday.

The effect of austerity on Ireland, imposed after the Irish economy tanked in 2008, was raised as a concern ahead of the threat of US tariffs.

I would make the case that regardless of what happens with tariffs, the Government needs to continue to commit to fund social and affordable housing

Austerity policies implemented in Ireland following the economic downturn in 2008 led to slashed public spending, job losses and emigration.

Although there has been a partial recovery, reliance on booming corporation tax receipts, mostly from US multinationals, has been repeatedly pointed out as a significant weakness of the Irish economy.

Speaking on the Leinster House plinth on Tuesday, Social Democrat TD Rory Hearne and Labour deputy leader Ged Nash said the Government needed to avoid making similar decisions made after the 2008 financial crash.

Mr Hearne said the Government needed to continue to invest in social and affordable housing while Mr Nash said Ireland needed to “learn the lessons of the last recession”.

Mr Nash said that supports should be provided for employees and businesses during “what’s going to be a difficult spell”.

He suggested enhanced credit guarantee schemes for the food and drink sector, and wage support systems.

“We don’t want the same thing to happen to pharmaceutical workers and food drink industry workers that happened to construction workers during the last economic crisis,” Mr Nash said.

Mr Nash said Ireland needed “to pivot away from our excessive reliance on the US”.

“But that’s not new. We have been saying this for many, many years now, and some of those chickens are coming home to roost, unfortunately.”

Mr Hearne said: “There’s obviously a lot of concern, deep concern, about what will the impact of tariffs be on the Irish economy, and that is across the board.

“If we’re going to see, for example, job losses and wage reductions, that has an impact in terms of housing, of course it does.

“Potentially in terms of housing demand, but then also in terms of the Government’s funding, in terms of housing, social and affordable housing.

“I would make the case that regardless of what happens with tariffs, the Government needs to continue to commit to fund social and affordable housing.

“We can’t repeat the mistakes that we made during the austerity period, when the economy tanked, that we cut capital funding.

“Really, we’re in this crisis because of those decisions made then.

“We don’t know what’s going to happen with tariffs, but we do know it’s one part of the economy, and we do need to keep it in perspective as well, and that our economy and economies function on the basis of all the investment that’s happening in the country, not just from the private sector, but also the state.”