Threat of pharma tariffs coming at a "tumultuous" time says IDA chairman

The chairperson of IDA Ireland, Athlone native Feargal O'Rourke, said foreign direct investment is slowing amid the "most tumultuous" time for international trade which the organisation has yet experienced.

His comments came after US President Donald Trump last week signalled his intention to introduce a 25% tariff on pharmaceutical imports to the US - a move which could seriously impact on the cluster of multinational pharma companies based in the IDA Business and Technology Park in Garrycastle, and in Monksland.

Speaking to the Westmeath Independent this week, Feargal O'Rourke said he was hoping talks would take place between the EU and US in a bid to avert the introduction of tariffs on US-bound pharma products.

He also said that the nature of pharmaceutical production meant it generally wasn't possible to pack up and move from one location to another overnight.

"If you look at pharma here, it's very capital intensive, it's a very regulated, and the operations they have are well-embedded in the ecosystem here," he said.

"So even if they wanted to move back to America in the morning, there's a lead time of setting up a capital intensive plant in a very regulated area - and then getting the people with the right skills. That takes a few years.

"So I'm hoping, rather than hopeful, that the EU and the US will engage and it hopefully will become very clear very soon that actually Ireland is good for America, and it's good for these companies. The operations they have here support their share price, which keeps the stock market high.

"There will be an awful lot of talking and negotiating done, I suspect, over the next nine or ten months."

Mr O'Rourke, son of the late former Government Minister Mary O'Rourke and brother of Athlone councillor Aengus O'Rourke, became chairperson of IDA Ireland at the beginning of last year.

At the launch last week of the IDA's strategy for the next five years, he said the current environment was the "most tumultuous" it had seen - not only because of the potential impact of the Trump administration but also because other countries were becoming "more protectionist" around international investment.

"There are also a lot of new entrants on the market, particularly in the Middle East, who are throwing money at people to come and set up operations there," he said.

"Supply chains after Covid, and because of the wars in Ukraine and the Middle East, are really disrupted. Climate change is beginning to take hold... and Artificial Intelligence is beginning to shake up business."

However, he said that Ireland was entering this volatile period from a position of strength, with 302,000 people employed here by foreign direct investment companies.

On the threat of pharmaceutical tariffs, he said Ireland exports some €40 billion worth of pharma goods to North America.

"President Trump is only focused on stuff that's sold back to the US. There's plenty of pharma (produced in Ireland) that's sold to the rest of the world and wouldn't be affected by these tariffs at all," he said.

"I just don't think it's possible for these industries to uproot themselves immediately. It's just physically not possible."

He said he was an optimist by nature and was hopeful that Ireland - and Westmeath - would continue to see strong investment from overseas companies in the years to come.

"We have a nice new (IDA) office in Athlone and a business park there, and hopefully we can get more (business) down to Westmeath, with a Minister from Mullingar and a chairman from Athlone.

"As I said at the strategy launch last week, there's no better place than Westmeath for an industry to come!"

He became the chair of IDA Ireland after spending 37 years working for Pricewaterhouse Coopers (PwC), and he said he was enjoying the challenge of chairing the IDA at this relatively volatile time internationally.

"It's like if you're going for the championship - that's much more interesting than being mid-table," he said. "There's always that bit of excitement about it, or, I suppose, if you're trying to avoid relegation!"

And he said that if Ireland can navigate the next few years successfully, there is potential for a new "golden age" of international investment in the coming decade.

"When I joined the workforce in 1986, Ireland was radically different. What we're dealing with now is a lot of the problems of success," he said.

"If you look at the changes we need to make in housing, the grid, energy, water... these are all problems because we've gotten to have a successful, growing population.

"I'm an optimist by nature, as was my mother and all my political family. I still think the best days are ahead of us.

"If we can get through the next 12 months and start working to sort out housing, the grid, water, I think actually we could be in for another golden era in foreign direct investment in the 2030s," he concluded.