IDA Ireland's Michael Lohan Talks Tariff Threats
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Well, the latest tariff threats from the US president are casting a shadow over the start of the World Economic Forum in Davos. European leaders are due to meet now later this week to discuss their response, which could include placing limits on market access for American companies. Let's discuss now with Michael Lowen, the CEO of IDA Ireland, the government agency charged with attracting foreign direct investment, who joins us from Davos. Michael, good morning. How worried are you about this latest escalation of tensions between the US and Europe?
Good morning Stephen, yes I think the last 48 hours have certainly brought another level of uncertainty for global trade and for international companies.
What are the implications of US tariff threats on global trade?
Just last week actually I was in the US on the west coast and it's quite clear from an enterprise perspective what they look for is they need global markets, they need global presence and global workforce And that's what they want to do. And of course, when you have maybe some potential changes in terms of tariffs, that can be disruptive. And we've seen that last year. The first half of last year was quite difficult from an FDI flow perspective. And obviously, decision making became quite delayed during that period. So hopefully, we will see some dialogue over the coming days that can maybe bring more clarity and direction in the future.
In your conversations with those US companies, do you get a sense of frustration that they're unable to plan or make decisions because of the changing policies?
Well, I think the dynamics has probably shifted from I came out of the US and from even on Thursday night to this morning. And so last year, as we know that there was delays in the first half of the year in terms of decision making, that actually moved. I think companies found paths and again, decisions have to be made in order to support innovation, in order to serve markets. And so I think in some ways it's almost a deja vu back to where we were last April. But I do believe that the resilience of the enterprise base will continue to see their path through because we have, and I think enterprise, have seen the means in which you need to respond in terms of global investment and global flows. And I think that will continue.
It's just that it brings another level of complication and complexity within their business.
We're waiting to see how exactly Europe will choose to respond to this. France wants the EU to consider using the anti-coercion instrument, which could include measures like limiting market access for American companies. How damaging could that be for Ireland, given the large amount of US investment there?
Well, I actually think it would be damaging for the global economy. I think beyond Ireland, of course, certainly it would be an impact in all of our economies across the continent of Europe. Because remember, we have European companies serving global markets. We have US companies serving global markets, including the European markets. So it would actually have an impact in both directions. And I think what we're advocating for, and I think that's what most people are advocating for, is for dialogue and to get, I suppose, into negotiations and discussions in respect of setting aside the tariffs. I think we have an agreement in place between Europe and the U.S., In our mind, that should be honoured and put into force.
And if there's other elements that need to be discussed, then they should be discussed and clarified. But I think we need to bring certainty to international trade because it is the lifeblood of all of our economies.
Would you be encouraging the Irish government to vote against using this anti-coercion tool?
Well, I think that's a decision for the Irish government, but I think from an Ireland government perspective, and we've heard the Taoiseach just speaking this over the last number of hours as well, is that we think it's time for some reflection and dialogue. I would certainly support that. But of course, there will have to be decisions made at
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