DUBLIN, Ireland: The Irish government is preparing for potential economic fallout from new U.S. tariffs, as concerns grow over President Donald Trump's aggressive trade policies.

Minister for Public Expenditure Jack Chambers warned that tariffs would be "extremely damaging and disruptive" to Ireland's open economy.

Speaking ahead of Taoiseach Leo Varadkar's upcoming meeting with President Trump in the Oval Office, Chambers emphasized the importance of highlighting "the broader balanced relationship that exists in economic terms" between the U.S. and Ireland.

Chambers told Newstalk radio that the Department of Finance and other government agencies are engaged in "extensive contingency planning" to mitigate potential "disruption and damage" caused by tariffs.

"[Tariffs will] have serious disruption to integrated global supply chains that lead to higher costs for consumers. Increased inflation and protectionism damage economies," he said.

Trump recently announced a 25 percent tariff on imports from Canada and Mexico, and speculation is growing that his administration may extend tariffs to the European Union, potentially affecting Irish exports.

The U.S. was the top destination for Irish goods exports in 2023, with sales reaching 54 billion euros, including 36 billion euros in pharmaceuticals and chemicals. Pharmaceutical products are usually exempt from tariffs under a 1994 World Trade Organization agreement, but experts fear Trump may disregard these norms.

Chambers acknowledged Ireland's vulnerability, stating that tariffs pose a "significant downside risk for the Irish economy."

"We are exposed in the context of the broader geopolitical issues as they're crystallizing and changing nearly every day," he said.

He added that whether tariffs are imposed across the EU or on specific products and sectors, the impact on Ireland would be severe. "Our whole economic model is on the basis of international trade, and we've got a very diversified export model across many different sectors."

The Department of Finance is "scenario planning" various responses to protect Irish businesses and workers. "What we are doing is calibrating the variety of responses that we would make in the context if tariffs will be imposed so we can try and protect Irish interests," Chambers said.

In a later interview with RTE's Morning Ireland, he declined to speculate on the specific impact on pharmaceuticals but warned that tariffs rising from 1 percent to 25 percent would have a "significant and turbulent impact" on both Ireland and the broader European economy.

"These are all downside risks," Chambers concluded. "That's why our overall economic management is central to protecting Ireland for the future."