Business investment in Ireland is being weighed down by the uncertainty caused by US President Donald Trump’s tariffs, according to the Governor of the Central Bank.
Speaking at a Dublin Chamber of Commerce event, Gabriel Makhlouf said the rapidly changing policy environment is having an impact even without any specific details of Mr Trump’s plans for the future of tariffs.
Mr Makhlouf said Ireland has considerable “economic vulnerabilities” given its relationship with both the European Union and United States.
He also warned that the public finances may be the first area hit given the exchequer’s heavy reliance on corporation tax receipts.
The Central Bank Governor said he wrote to Minister for Finance Paschal Donohoe earlier this year to encourage him to prioritise broadening the tax base, reducing the cost of large infrastructure projects and to encourage further productivity in the workforce through measures like life long learning.
When it comes to inflation, Mr Makhlouf said it is “difficult to say” what impact US tariffs and any retaliation by the EU and others will have.
“It will be influenced by a number of factors, including trade diversion, especially China-EU trade flows, and the exchange rate,” he said.
