The Minster for Finance has warned that the restrictions China has placed on exports of rare earths and other minerals used in advanced manufacturing could create a shock to global economic activity.
Speaking to RTÉ News at the IMF and World Bank autumn meetings in Washington DC, Paschal Donohoe said the Chinese move "has the potential to be the kind of economic development that could pose a shock to global economic growth. It's not just America that will be affected by this.
"It's Europe as well. It's many other parts of the world. And that's why it's really, really important that in the weeks that awaits us now that we look at what kind of diplomacy or negotiation can play a role in avoiding that kind of shock developing."
War and disruption have been key topics at the IMF meetings this week.
The ending of the war in Gaza and the meeting between President Donald Trump and Ukrainian President Volodymr Zelensky at the White House about a possible start to peace talks with Russia have loomed large in discussions involving the world's finance ministers and central bankers, who will have to come up with reconstruction finance for both countries - but only when fighting definitively stops.
"Gaza has been a big theme of the discussions here in the World Bank and the International Monetary Fund", said Mr Donohoe.
"The president of the World Bank has put together an expert panel on the reconstruction of Gaza.
"It was discussed earlier on today, and the two elements that are emerging from it is, firstly that international cooperation and funding is going to be critical to the reconstruction of Gaza, and then secondly, that all parts of the world will need to play a role in us, and I would anticipate that Ireland and the European Union will be willing to play such a role.
"But we'll need to understand what the overall cost will be in relation to it and how that work can be done safely."
Watch: Donohoe anticipates Ireland and EU will play a role in Gaza reconstruction
Yesterday, the Palestinian Authority announced plans for a $67 billion reconstruction programme for Gaza.
Egypt will host a donor conference next month in Cairo to try and secure funding commitments from international donors. The three-phase plan aims to rebuild homes, infrastructure, economic activity, and governance destroyed in two years of war.
In Ukraine, the fighting is drawing towards the end of the fourth year of fighting, with no peace plan on the table as yet. Still the international community, and particularly Europe, has to look to a post war rehabilitation of the country, especially its destroyed infrastructure and economic assets.
"The economic needs for Ukraine are going to be very, very considerable", said Mr Donohoe, who also chairs the committee of Euro Area Finance Ministers, the Eurogroup. The EU has already pumped billions of euro into Ukraine to keep its government and economy functioning.
"It should be noticed that money we pay for reconstruction is taking place in the context then of conflict and war not happening, which would be an incredibly positive development, not just for the people of Ukraine, but also for all who've been affected by this war.
"In terms of how that (financing or reconstruction) will be moved forward, It will be, firstly, through the work that the IMF will do.
"The IMF have had a programme in place over the last number of years that has directly provided economic support to Ukraine, that all other members of the IMF, including Ireland, have played a role in funding. And what we'll need to see happen is, I hope, a further support framework from the IMF is put in place for Ukraine, and through that, then all other countries can play a role in meeting the financing needs of Ukraine."
The war in Ukraine is weighing on the European economy, depressing economic growth across much of the continent.
The IMF's world economic outlook published this week said the euro area as a whole will grow by 1.1% next year, with Ireland expected to grow by 1.3% in 2026, after a forecast 9% growth this year, driven by exceptional exports of pharmaceutical products to the US ahead of the new tariff regime coming in.
"So, the growth performance of the euro area and the European Union is better than expected, but it's still not where we want it to be", said Mr Donohoe.
He added: "We're going to see the European Union, the euro area, grow by over 1% next year - that is better than what's expected due to the economic effects of the war on the people of Ukraine, but we have a lot of work to do to ensure the European Union can grow quicker.
"We know what the projects are that we need to deliver to make that happen, and our growth performance is positive, but needs to be higher, and we need to get on with delivering those projects.
"We've worked we need to do in Ireland ourselves. Our economy is still growing. It's still in a very positive place, but it has been affected by tariffs, and it has been affected by the atmosphere of global economic uncertainty. So, the work that we're doing with the national development plan will be critical in how we can offset the lower level of growth.
"And then some of the projects that the European Union wants to deliver will be entering into a critical phase under our presidency of the European Union in the second half of next year, and we're going to have a central role to play with regard to that. That's projects like the digital euro and really important projects that will be about how we can make better use of European savings. So, Ireland will be in the middle of that, and I look forward to us playing a good role on those projects."
Watch: Donohoe says China's restrictions on rare earths could create shock to global economy
The IMF has been notably more relaxed about the impact of the Trump tariffs on the global economy, noting a shift in export growth away from the US and towards other parts of the world, as businesses responded to the tariff by seeking new markets.
"So, it is fair to say that the global economy is proving itself to be more resilient than we would have expected when we last met here in April," said Mr Donohoe.
"But even though that resilience is there, I also detect real caution regarding what the outlook could bring. There's one or two sectors that are playing a huge role in global economic resilience, particularly in the AI sector. And of course, we have to see to what degree that growth will be sustainable in the time ahead.
"And then, while there is a higher level of certainty regarding what the level of tariffs are, it may yet take a bit more time for us to see what effect those tariffs have on profitability and in turn, then on economic growth and on levels of employment.
"So, I think there are some reasons for optimism, but we need to accompany that optimism with a heavy dose of caution as well."
