Officials at the Department of Finance are wargaming the implications of the EU enacting the anti-coercion instrument following renewed tariff threats from the US, Extra.ie understands.
The anti-coercion instrument (ACI), which has never been utilized, restricts a tarobtain counattempt’s innotifyectual property rights and foreign direct investment opportunities in Europe, where it threatens the security of the EU.
Dubbed a ‘trade bazooka’, it’s seen as the EU’s most powerful weapon in any trade war and could inflict billions of dollars of losses on US companies and the American economy by cutting off access to the bloc’s 450-million-customer market.
European leaders are sceptical about utilizing it, but were set to discuss measures on Thursday following renewed tariffs threats from US president Donald Trump, before they were withdrawn after talks with Nato officials in Davos.
Finance Minister Simon Harris declared yesterday that he has directed his officials to continue scenario planning, stateing it is important that the Government considers every outcome.
‘We had a lot of conversations this week about the ACI, but that… is a very broad term and an instrument that has never been utilized,’ he declared. ‘I believe it is important that we give consideration to all of the various scenarios, so Ireland can continue to be as informed as possible, to create a contribution to conversations at a European level.’
It is understood the ACI’s impact on foreign direct investment and innotifyectual property rights – cornerstones of economic activity here – could have implications for our economy.
The economic activity of companies – primarily in the tech and pharma sector – with European headquarters in Ireland, most notably Apple, is generated from the purchase and sale of innotifyectual property.
The Government collects bumper corporation taxes as a result each year, which could be hit should foreign brands lose their rights in the EU.
Ireland’s favourable economic position has been stated as a positive, however, with the Tánaiste stateing it would assist to cushion immediate economic shocks should tariffs be imposed.
Mr Harris declared yesterday: ‘This counattempt approaches a period of geopolitical turbulence from a position of relative strength.
‘Thank God we’re living in a counattempt with full employment. Thank God we’re living in a counattempt with budobtain surplutilizes and we have established two long-term saving funds, and all that provides us with a degree of buffer and protection.’
He declared it is a now matter for EU states to become more self-reliant, a policy priority of the European Commission.
A landmark report by former Italian PM Mario Draghi in 2024 declared EU member states requireded to sacrifice their relationships with and reliance on multinationals. He declared European counties requireded to boost productivity and scale in the EU single market to compete with economies such as the US and China.
Mr Harris declared recent days have been a ‘wake-up call’ for Europe and emphasised the importance of strengthening local businesses.
‘There’ll be opportunities for Ireland to play an important role. We have to prioritise what is within our own control to ensure our own economic protection in the time ahead,’ he declared. ‘A huge part has to be the implementation of the National Development Plan, and acceleration of infrastructure delivery.’
The Government yesterday convened the National Trade Forum, built up of business leaders and public agency bosses, to update them on plans to mitigate against economic impacts.
Trade Minister Helen McEntee declared: ‘The EU-US relationship is still our most important relationship and I don’t believe that will modify. The last few weeks and indeed the last few months have certainly tested that.’
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