WEBVTT - IDA Ireland's Michael Lohan Talks Tariff Threats

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. Well, the light is

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<v Speaker 1>tier of threats from the US president are casting a

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<v Speaker 1>shadow over the start of the World Economic Forum in Davos.

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<v Speaker 1>European leaders are due to meet now later this week

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<v Speaker 1>to discuss their response, which could include placing limits on

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<v Speaker 1>market access for American companies. Let's discuss now with Michael

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<v Speaker 1>Lowe and the CEO of IDA Ireland, the government agency

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<v Speaker 1>charged with attracting foreign direct investment, who joins US from Davas. Michael,

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<v Speaker 1>good morning. How worried are you about this latest escalation

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<v Speaker 1>of tensions between the US and Europe.

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<v Speaker 2>Good morning, Stephen. Yes, I think the last forty eight

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<v Speaker 2>hours have certainly brought another level of uncertainty for global

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<v Speaker 2>trade and for international companies. Just last week, actually, I

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<v Speaker 2>was in the US on the West coast, and it's

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<v Speaker 2>quite clear from an enterprise perspective, what they look for

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<v Speaker 2>is they need global markets, they need global presence and

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<v Speaker 2>global workforce, and that's what they want to do. And

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<v Speaker 2>of course, when you have maybe some potential changes in

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<v Speaker 2>terms of tariffs, that can be disruptive, and we've seen

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<v Speaker 2>that last year. The first half of last year was

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<v Speaker 2>was quite difficult from an FDI flow perspective, and obviously

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<v Speaker 2>decision making became quite delayed during that period. So so

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<v Speaker 2>hopefully we will see some some dialogue over the coming

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<v Speaker 2>days that will maybe bring more clarity and direction in

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<v Speaker 2>the future.

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<v Speaker 1>In your conversations with those US companies, do you get

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<v Speaker 1>a sense of frustration that they're unable to plan or

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<v Speaker 1>make decisions because of the changing policies.

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<v Speaker 2>Well, I think the dynamics has probably shifted from I

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<v Speaker 2>can out of the US and from even on Thursday

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<v Speaker 2>night to this morning, and so last year obviously know

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<v Speaker 2>that there was delayed in the first half of the

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<v Speaker 2>year in terms of decision making that actually moved. I

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<v Speaker 2>think companies found pats and and again decisions have to

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<v Speaker 2>be made in order to support innovation, in order to

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<v Speaker 2>to to serve markets, and so I think in some

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<v Speaker 2>ways it's almost almost a deja vous back to where

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<v Speaker 2>we were last last April. But I do believe that

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<v Speaker 2>the resilience of the enterprise base will continue to see

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<v Speaker 2>with their path through because we have and I think

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<v Speaker 2>enterprise have seen have seen the means of which you

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<v Speaker 2>need to respond in terms of global investment and global flows,

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<v Speaker 2>and I think that will continue. It's just that it

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<v Speaker 2>brings another level of complication and complexity within their business, and.

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<v Speaker 1>We're waiting to see how exactly Europe will choose to

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<v Speaker 1>respond to this. France wants the EU to consider using

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<v Speaker 1>the anti Coercion Instrument, which could include measures like limiting

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<v Speaker 1>market access for American companies. How damaging could that be

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<v Speaker 1>for Ireland given the large amount of US investment there.

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<v Speaker 2>Well, I actually think it will be damaging for the

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<v Speaker 2>global economy. I think beyond the Ireland, of course, certainly

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<v Speaker 2>it would be an impact in all of our economies

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<v Speaker 2>across the across the continent of Europe, because remember, like

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<v Speaker 2>we have European companies serving global markets, we have US

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<v Speaker 2>companies serving global markets, including the European markets. So it

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<v Speaker 2>would actually have an impact in both directions. And I

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<v Speaker 2>think what we're advocating for, and I think that's what

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<v Speaker 2>most people are advocating for, is is for dialogue. And

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<v Speaker 2>to guess, I suppose into negotiations and discussions in respect

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<v Speaker 2>of of setting aside the tires.

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<v Speaker 1>I think we have an.

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<v Speaker 2>Agreement in place between Europe and the US in our

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<v Speaker 2>mind that should be honored and put into force. And

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<v Speaker 2>if there's other elements need to be discussed on within

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<v Speaker 2>They should be discussed and clarified. But I think we

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<v Speaker 2>need to bring certainty to international trade because it is

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<v Speaker 2>the lifeblood of all of our economies.

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<v Speaker 1>Would you be encouraging the Irish government to vote against

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<v Speaker 1>using this anti coersion tool.

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<v Speaker 2>Well, I think that's the decision for the Irish government.

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<v Speaker 2>But I think from an Ireland government perspective, and we've

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<v Speaker 2>heard the t shot just speaking this over the last

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<v Speaker 2>number of hours as well, is that you know, we

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<v Speaker 2>think it's time for some reflection and dialogue. I would

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<v Speaker 2>certainly support that, but of course there will have to

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<v Speaker 2>be decisions made at junctures and at particular junctures, so

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<v Speaker 2>I think that should be a last resort from from

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<v Speaker 2>from a European perspective, we should look to dialogue and

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<v Speaker 2>resolution because as I mentioned, I think it will be

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<v Speaker 2>it would be challenging both for the US economy and

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<v Speaker 2>indeed for the European economy.

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<v Speaker 1>Michael, you're in Davos to meet with business leaders to

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<v Speaker 1>talk about foreign investment to promote Ireland as a destination.

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<v Speaker 1>How do you have conversations like that when the whole

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<v Speaker 1>environment is so uncertain.

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<v Speaker 2>Yeah, it's it certainly is a different dynamic Stephen, I

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<v Speaker 2>think that's correct, but maybe I'll go back to the

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<v Speaker 2>to the principles. First of all, is that when you

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<v Speaker 2>have international companies, they are serving international markets, so their

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<v Speaker 2>markets still exist, their need for their product and their

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<v Speaker 2>services still exists. The need for them to innovate and

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<v Speaker 2>bring their their their R and D pipelines to fruition,

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<v Speaker 2>that's still that's still is in play. And indeed companies

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<v Speaker 2>are looking to increase their supply chain, supply chain resilience,

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<v Speaker 2>you know, in terms of decarbonization and sustainability to their

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<v Speaker 2>supply chain. All of those elements still exist and are

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<v Speaker 2>require because companies are future focused, the future focused in

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<v Speaker 2>terms of growth, the future focused in terms of product

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<v Speaker 2>and services, and that's where we will have our conversations. Yes,

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<v Speaker 2>we have to be conscious of the over arched and

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<v Speaker 2>geer political environment, but ultimately companies will look to the

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<v Speaker 2>future and look to actually see how they can continue

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<v Speaker 2>to trade internationally, how they can have the best product

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<v Speaker 2>and services and indeed the best workforce globally to support

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<v Speaker 2>their business needs.

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<v Speaker 1>Are you seeing that companies, though, are having to downplay

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<v Speaker 1>announcements about foreign direct investment decisions because of the fear

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<v Speaker 1>of criticism from the Trump administration. You had a record

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<v Speaker 1>year for attracting foreign direct investment last year. Are companies though,

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<v Speaker 1>trying to keep it quiet about some of the investments

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<v Speaker 1>they're making.

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<v Speaker 2>Well, you're correct. We had a record year last year,

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<v Speaker 2>and I think if you put that in the backdrop

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<v Speaker 2>of the year that was twenty twenty five an outstanding

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<v Speaker 2>performance to actually deliver a record year from an FDI perspective,

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<v Speaker 2>And just to put that in context, we had a

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<v Speaker 2>thirty six percent uplift year and year in twenty twenty

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<v Speaker 2>five across all territories, you know, across all territories across

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<v Speaker 2>the globe. And what really was impactful on that is

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<v Speaker 2>that maybe I'll just speak to the three areas. First

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<v Speaker 2>of all, first time investments into Ireland continue to remain strong,

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<v Speaker 2>so twenty five percent other investments or almost eighty investments

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<v Speaker 2>or first time investments into Ireland. The second area was

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<v Speaker 2>innovation in R and D really strong two point five

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<v Speaker 2>billion supported last year through the IDA in terms of

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<v Speaker 2>R and D investments. And the third area was a

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<v Speaker 2>real focus on transformation upstilling of the workforce. We supported

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<v Speaker 2>almost thirty four thousand people in the Irish workforce to

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<v Speaker 2>be upscaled last year. So we're seeing companies continue to

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<v Speaker 2>be that future focus. And just on announcement. Just last

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<v Speaker 2>last Friday actually we had an announcement with Caalcom actually

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<v Speaker 2>expanding their operations in Ireland and that's on semiconductor design.

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<v Speaker 2>So yes, investments continues, announcements continue, but I think companies

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<v Speaker 2>are also very conscious of the world in which we

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<v Speaker 2>now reside.

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<v Speaker 1>How does the year ahead look? Where I think is

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<v Speaker 1>it going to be a more difficult year.

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<v Speaker 2>I think the year ahead is going to continue to be,

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<v Speaker 2>you know, hyper competitive. I think it's going to continue

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<v Speaker 2>to I think bring challenges as we go forward, and

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<v Speaker 2>I think as it starts, I think we're going to

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<v Speaker 2>continue to see that. And I think what we're seeing

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<v Speaker 2>is that, you know, the pace of change, the pace

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<v Speaker 2>of innovation is continuing and we're going to have to

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<v Speaker 2>continue to adapt and be agile because the world has

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<v Speaker 2>certainly the pace of of both from a geopolitical perspective

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<v Speaker 2>and technology perspective continues.

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<v Speaker 1>Okay, Michael Lowan, CEO of i D A Ireland, thank

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<v Speaker 1>you very much for joining us from Davos this morning,