Budget 2026: Engineering sector calls for introduction of state-backed Export Credit Insurance Scheme amid US tariffs

Engineering Industries Ireland (EII), the Ibec group representing the engineering sector, is calling for the establishment of a State backed Export Credit Insurance Scheme to mitigate risks in the current trading environment, such as the recently introduced 15% US export tariff. In publishing its 2026 Budget submission, the group warned that the US import tariffs of 15% on EU manufactured industrial products, auto parts and semiconductors, introduced in July, are placing significant pressure on key Irish export margins and undermining sectoral competitiveness.

EII, whose members account for €8.8 billion in exports (3.6% of national exports), 10,800 enterprises employing 50,751 people, and a 65% share of indigenous companies, also notes that 71% of engineering firms identify attracting and retaining talent as a top priority. To bridge skills gaps and drive a low carbon, innovation led economy, Ireland must update its National Skills Strategy, promote lifelong learning, and improve real time labour data for workforce planning, according to the submission.

Pauline O’Flanagan, Director of EII, said:

“Ireland’s engineering firms are on the frontline of the US tariff escalation. Many are facing immediate financial strain and growing uncertainty about future trade prospects. We need a strong and strategic response to help these businesses navigate global volatility and stay competitive, while also supporting market diversification.”

Despite being one of the EU’s most open economies, Ireland remains one of the few Member States without a fully fledged export credit insurance scheme. This puts Irish exporters, particularly small and mid sized enterprises (SMEs), at a disadvantage compared to their European peers.

EII has consistently called for the introduction of a national scheme that reflects the realities of modern international trade. In today’s climate of geopolitical risk, supply chain reconfiguration and intensified global competition, that call has become more urgent than ever. It is time to level the playing field.”

Engineering Industries Ireland's full Budget 2025 submission is available here.

Notes:

• A dedicated state-backed export credit agency (ECA) is a government-supported institution that provides financial products and insurance to support domestic companies in exporting their goods and services to international markets.
• Examples include UK Export Finance (UKEF) in the UK, Euler Hermes in Germany, and SACE in Italy. In Ireland, Enterprise Ireland plays some of this role.
• However, a dedicated ECA could provide a range of financial tools and risk-mitigation services, particularly in terms of insurance, to cover non-payment by foreign buyers due to commercial or political risks and support exporters to sell into riskier markets with confidence.
• Export credit insurance is a financial safeguard that protects businesses from the risk of non-payment by international buyers, due to reasons ranging from commercial insolvency to political instability.