Trump is learning he can’t always get what he wants. But neither can Ireland |
Reality and the rules of economics will catch up with Donald Trump at some stage. But perhaps not for a while yet. For a small country like Ireland, hugely reliant on the US, there are dangers here, though the evidence of Trump’s first year in office is that they may be more over the next three to five years than immediately. Goodness knows short-term turbulence will always remain a risk. But what Ireland really needs to focus on is the medium term and in particular the risk of Trump-driven manufacturing investment in the US threatening Ireland’s jobs and tax revenues.
Short-term risks remain. Ireland could still get caught right in the middle of a damaging trade war. But approaching the midterm elections in November, the US president will probably avoid anything that will slow growth in the US and upset voters – and a trade or wider economic war would do just that.
Trump will try to get the economy speeding along and face the consequences later. The price of this, in time, is likely to be higher inflation and a lower US dollar, but that won’t stop him.
Tariff threats will continue to be thrown around. But the lesson of year one is that a lot simply do not happen. There has been a significant change. The average tariff on goods entering the US has risen sharply – from less than 2 per cent under Joe Biden to around 14 per cent now, with the bulk of the extra costs falling on the US consumer.
But time and again Trump has backed away or delayed. He knows tariffs affect the cost of living, despite his administration’s denials. There is no sign, for example, of the special report commissioned on chip production and pharmaceuticals which........