EU US trade talks are said to be heading in the right direction after a meeting between the European Trade Commissioner mars Chefsovich and the US Trade representative Jamerson Greer yesterday, which Aftervich also warns that the EU was ready to defend its interests and negotiations as time ticks down on the pause on Donald Trump's tariffs. So how is the up ending of transatlantic relations affecting the environment for foreign
direct investment in Europe? To discuss, we're joined in studio by Michael Lowe and CEO of IDA Ireland, the Irish government agency charged with attracting foreign investment. Michael, good morning, Welcome to Bloomberg Radio. How much more difficult is your job gotten since Donald Trump became president?
Yeah, So I think what you're correc Stephen, you've outlined we are seeing a shift in terms of the geopolitical landscape, the industrial landscape. But in essence we've actually been seen the industrial policy shifting for the last.
Twenty four months.
You know, we had the European Chips Act in response to the US Chips Act and the Inflation Reduction Act, so we've seen a significant change in policy. What we've seen in the last six months, particularly is I suppose the movement from the US US administration from a tarist perspective. So that's in some ways compounding and increasing that level of change.
But it's also important.
To recognize as well as that, you know, as for an FDI perspective, we continue to see FDI investments flow. Companies you know, are international by their very nature, and by that means by that means that they need international markets and international presence, and we continue to see that flow happening, albeit that some decisions are taking longer than would have here before.
How much is the uncertainty affecting that our companies simply holding off? Are they? Are they pausing conversations with your agency about investments?
Yeah, So I's two things.
Firstly, I think conversation actually is probably higher now.
Than it was in the past.
So I think the relationship and maybe that's where the strength of an organization like IDA, where we have a long standing relationship with our client companies, you know, So that level of engagement, I would say is continues to be high, and for us, that's critically important that we stay close to our to our clients and to the sectors to understand where their concerns are because you're X. Secondly, there is has been and continues to be a level
of uncertainty, you know, and in some ways that uncertainty, to my mind, was very much at its peak in March April timeframe had possibly moved on as we started to see maybe some movements around the tariffs and the and the delays and negotiations, and I think we have
to continue on that trajectory. And from an Irish government perspective and an idea perspective, we're very clear that we have to continue those negotiations and that's why it's it's heartwarming to hear the comments coming from Yester, the discussions as you mentioned, and the fringes in Paris. You know that we actually get Europe and the US to continue to negotiate because the Europe and US relationship is so
important to the global trade. It's the largest global trade in the world, and we need to find solutions, you know, and a zero for zero tariff basis is really what we're promoting at this point.
But the EU has also been taking a more as a strident response to Donald Trump's tariff threats than for example, the UK. Does that put Ireland at particular risk because of it exposure in the major investment from US companies in Ireland.
I don't believe it does, and I think it's appropriate to do that. I think we have to plan, and I think from an Ireland perspective and a European perspective, our overarching focus is on negotiation and to get a negotiated solution, but we also need to do scenario plans, and I think in fairness to you know, at a state level, at a European level, it's important we do that so we can understand the consequences or not of those decisions and we can prepare if that's what we need to do.
But I would say it's even that it's important.
Like from a European perspective and an Ireland government perspective, our fundamental principle is to negotiate, is to get a position of mutual benefit. Because if we look at even the FDI flows we talked about from Ireland to the US, Ireland is the seventh largest investor in the US economy. There are almost as many people employed in US companies sorry, but Irish companies in the US as there are US companies in Ireland.
So this is a bilateral.
It supports a two way flow on two where benefits and we want to protect that.
The figure that Donald Trump has been paying attention to is the trade deficit in goods, in particular when it comes to biomedical and pharmaceutical. That's a very large figure when it comes to Ireland. What's your reason of those sectors we've been reporting, for example about pharmaceutical companies scaling back on office leasing in Dublin.
What witness or what effects are you saying?
Yeah, so I think from a life sciences or pharmaceutical perspective, we look at that in context, and you're correct that's where the largest deficit is in the goods from an Ireland US perspective. But also put in the context that eighty percent of that deficit is actually an unfinished product, so it's actually product that's come back to the US where there's further value being added for completion for US
or international international markets. So it's actually a key component. Secondly, the integrity and I think the complexity of global supply chains is critically important for life sciences companies in terms of making sure they have dual supply and sure they're able to have support international markets, and I think that's not going to change that. The strength of those supply chains is so crearly important to that in industry that
we believe that will be maintained. Yes, it may well be challenged in the short term, but long term, I think that's going to be maintained. I think from an Ireland perspective, we see investment continuing. Just this year we had, for example, ge Healthcare announced just over one hundred and twenty million investment in their existing facility in Ireland to support international supply chain.
So investments continue, but.
You're correct, albeit levels of uncertainty leads to longer decision time frames.
Is it life sciences that you're most worried about investment drying up in?
Well?
To be honest, I think if you look at the tariffs and where they're affected on goods, obviously that's the highest persentage from an FDI.
Perspective in Ireland.
Obviously there's other sectors that would be our food industry as well from an Ireland perspective we need to be conscious of and our drinks industry as well. But from an FDI perspective, that is the one you know, life sciences and medical device both significant in terms of their their physical presence in Ireland, the innovation that's happening in Ireland,
so we're very conscious of that. But we're also very conscious and aware of the strengths that the Irish sites bring to the global supply chain and the global delivery as well. So we have lots of strength to bring to that conversation.
Are there companies that are threatening to pull out that you've been working with?
No, absolutely not.
And the reason I say that is like these companies have invested in Ireland many for fifty sixty seventy years. They are embedded in Ireland, they have strong innovation, and they're serving global markets. And maybe just to put in final context and that if you look at all of the experts from FDI in Ireland, eighty five percent of those experts exports of goods and services are outside of North America serving international markets. So primarily serving outside North America.
I think that's a key component to remember.
I want to ask you as well, Ireland as a new review mechanism for FDI that came into force at the start of this year for sensitive investments from outside the European Economic Area.
Has that been used yet, No, it's certainly just coming into force at this juncture. So that's in terms of project screening pretty much. It's focused from an FDI perspective. Yes, we have to be conscious of it, but it's very much about national infrastructure as supposed to maybe mobile investment projects, which is it's probably somewhat different. So I don't think it's going to have a major impact in terms of our investor.
You're getting many questions about it from clients, not.
At this juncture, to be honest, it's it's pretty much in its early in its early stages of implementation. But I think as we go forward it possibly could become more to the four. But as I said, I don't see it as been particularly onerous from a from an idea perspective,