The Government has to ensure to be planning for the worst when it comes to US tariffs, the trade minister has claimed.

With the US President Donald Trump deeming April 2nd ‘Liberation Day’, Government’s across the world are preparing for an onslaught of tariffs – and Ireland is doing the same.

Over the weekend, US Secretary of Commerce Howard Lutnick called Ireland his favourite tax scam.

“The country of Ireland last year had a $60 billion budget surplus - so we lose $2 trillion and they make $60,” he said. 

On Newstalk Breakfast, Minister for Enterprise, Trade and Employment, Peter Burke said these comments have worried him, “especially when he has the figures significantly exaggerated”.

“I would say it is concerning to hear the President saying that April 2nd is going to be Liberation Day,” he said.

“But still, as an Irish government and as an EU [member state], we don't know the shape or form of what's going to happen on April 2nd and that makes it more difficult to respond to. 

“I do think the EU took a very fair move in that they're waiting to see exactly what the content is on the second rather than go ahead with reintroducing the tariffs that were already suspended on April 1.

“So we'll take a few weeks to have a look at the various different moves that the US make - there may be room for negotiation at that point in time and also we'd have to have a look at vulnerable sectors within an Irish context, because that's going to be very important.”

Minister Peter Burke on the plinth at Leinster House. Photograph: Sam Boal / RollingNews.ie

Minister Burke said there will be a “significant challenge” if the worst case tariff scenario were to happen.

“I think what the Government has to do now, what I want to do is critically improve our competitiveness,” he said.

“We have to take the opportunity in the challenges that we meet just like we did through COVID, or like we did through the various challenges we had in Brexit and diversifying our exports.

“We need to ensure that we're getting to grips on our energy, on our water and wastewater, and critically, our housing, which is number one priority for the Government to ensure that we are controlling the problems that are under our remit.

“I think as a country, our capital expenditure is stronger at record levels than it ever has been - we are in surplus and we have about €16 billion this year that we will continue to put by for both our sovereign wealth funds and that will give us the best chance to meet the challenge from a position of strength.”

Euro currency cash bank notes money blue background. Image: Alamy

Minister Burke said that depending on the size of the tariffs, the Programme for Government may have to be adjusted.

“We have to be very careful and the Programme for Government is very clear that if the economy was to encounter an economic shock, that we would have to revise a lot of what we're trying to do in the Programme for Government,” he said.

“But at this point in time, that hasn't happened, and obviously we're seeing huge investments still in our multinational sector, our indigenous economy is under pressure in certain areas, in terms of hospitality and retail.

“We're trying to do a huge amount in this budget, that will be our focus, trying to help those key areas.

“But obviously it will all depend on how the national picture is looking, but we are doing, I think, the responsible thing, and putting money by and also trying to work in an EU context to ensure that we get our input into whatever tariffs are agreed on midway through April.”

Donald Trump and Micheál Martin. Image: Newstalk.

Minister Burke said the Government needs to plan for “the worst”.

“I think you have to ensure that you are planning for the worst,” he said.

“The critical thing is it's so important invest in capital expenditure and we're going to hit over €15 billion this year, and if things get tight, the critical thing is not to lay back on capital expenditure.

“Because that's what happened, you know, over a decade ago, where the State went to not investing in people's future and the key infrastructure that attracts more talent, that attracts job, jobs that makes our economy competitive.

“We need to ensure we keep that expenditure up -that has to be the bottom line in any challenge that the State makes.”

US Dollars. Image: Alamy