Europe should work to strengthen trade with China, Tánaiste Simon Harris will tell his EU counterparts in Luxembourg on Monday.
Trade ministers are holding an extraordinary meeting to work on an official response to the 20% tariffs announced by Donald Trump last week, with members at odds on how far the EU should go to retaliate.
Finance minister Paschal Donohoe warned a projection the changes would cost up to 80,000 jobs in a worst-case scenario still stands, but said the country has not yet reached that situation.
However, he has ruled out a covid-style wage subsidy scheme for businesses that will be impacted by the tariffs, warning that the cost of such supports “could create other difficulties”.
While possible retaliatory measures are top of the agenda at the Foreign Affairs Council on Trade on Monday, EU-China relations will also be discussed, with commissioner Maros Sefcovic due to brief the gathering on his visit to Beijing in late March.
Speaking ahead of the crunch meeting, Mr Harris said: “We should not close ourselves off to trading with China. Quite the contrary.”
It signals a thawing in Government attitudes towards China and echoes comments made by Mr Harris at a trade forum in Dublin on Friday, during which he referenced the fact Brexit had also forced Ireland to broaden its trade horizons.
While an absolute decoupling from the US is not being considered, it has been noted that Asia represents two thirds of the global annual economic growth and Ireland is now well positioned with 17 embassies and a strong State presence in key locations such as Shanghai, Singapore, and Tokyo.
While China could provide new and expanded markets, there are also concerns around trade diversion and the possibility of the EU being flooded with products that are now subject to the US tariffs.
Mr Harris added: “Engagement and dialogue remain necessary, including to make clear to China the problems we face with its non-market policies and practices, as well as our resolve to act to defend fair competition and a level playing field. When I met with Chinese foreign minister Wang Yi in late February, I stressed these very points.”
On tariffs, Mr Harris is expected to make the argument for a calm and measured response. France and Germany already indicated they would be willing to take the “nuclear” option by targeting US tech companies, many of which have headquarters in Ireland.
“I will make clear to my trade minister counterparts Ireland’s commitment to EU unity, and the need to take a firm, but proportionate response, while working towards a negotiated solution,” Mr Harris said.
The Trump administration tariffs cover 70% of the EU’s exports to the US — worth around €532bn each year, and the US has suggested that further tariffs on copper, pharmaceuticals, semiconductors, and timber are still to come.
Ministers are expected to discuss a list of US products prepared by the EU Commission that could be hit with counter tariffs including cereals, wine, wood, and clothing, as well as chewing gum, dental floss, vacuum cleaners, and toilet paper.
While the EU will be negotiating as a bloc with the US, Mr Harris will travel to Washington on Wednesday where he will meet with his counterpart Howard Lutnick.
US national economic council director Kevin Hassett said on Sunday that more than 50 countries have now reached out to the White House to begin trade talks.
As US stocks tumbled by 10% in the two days following the announcement, Mr Hassett denied the tariffs were part of a strategy to crash financial markets and pressure the US federal reserve to cut interest rates.
