A Minister said the Government will have to “rewrite the budget” as the implications of the US-EU trade deal sink in, write John Drennan and John Lee.

A meeting of the Government Trade Forum on Friday heard the new, 15% tariff on exports to the US will cost the Irish pharmaceutical industry €6bn a year and result in up to 70,000 fewer jobs created over the next five years.

The Government did not make allowances for any tariff rate in its €9.4bn Summer Economic Statement.

Labour finance spokesman Ged Nash accused the Government of being “reckless” and “irresponsible”.

He said: “At a time of real uncertainty, a Summer Economic Statement that didn’t take account of the 15%, or even the 10% tariff scenario, is reckless and irresponsible of a party whose reputation for fiscal responsibility is completely unwarranted.

“I don’t envy Fine Gael when they have to explain to middle-income PAYE workers that there isn’t enough cash left in the till to fully index their tax and USC against wage growth.”

One minister said the Coalition will have to “rewrite” the budget as a result.

They said: “The reality is we are going to have to rewrite the budget and not in a way that will be politically easy.

“There is a €6bn black hole in areas such as pharma alone.”

Mr Nash also criticised the Government’s plan to cut the VAT rate for the hospitality sector.

“The Minister for Finance [Paschal Donohoe] told me this week that it will cost about €810m in a full year to reduce the VAT rate across hospitality to 9%.

“To put that in practical terms, that’s what it would cost for a second tier of child benefit that could rid us of the scourge of child poverty. These are the choices.”

The Louth TD added: “Even if this is to be construed as a wellmeaning but poorly designed measure to help small local businesses, the fact is it will be high-turnover, big operators who will cash in, and at our expense.”

Fine Gael ministers who spoke to the Irish Mail on Sunday over the weekend said they are not wedded to when the VAT break is introduced for hospitality.

One Cabinet source said: “We are not too concerned about that. Fianna Fáil are going to get credit for the energy VAT rate [reduction], and we will get this.

“If it has to be next summer, so be it.”

With just €1.5bn earmarked for tax changes in Budget 2026, ministers admit there will be “very little room for a personal tax package”.

One noted that, “most years” the cost of personal tax cuts amount to “around €1.2bn to €1.4bn, and that is basically giving people a fiver a week”.

They added: “As you can see, the total tax package is €1.5bn. You have to keep the VAT at 9% on gas and electricity – that costs about €200m.

“So that’s €200m gone. You have to pay for the renter’s tax credit, [and] you have to do something for businesses in foreign direct investment.”