1 week Ago
If the Trump administration was expecting gratitude for what at best is an indefinite reprieve from financial chaos, it will be disappointed. For one thing, the temporary lowering of tariffs for a period of 90 days was forced on Washington. For another, as Taoiseach Micheál Martin noted, Ireland and Europe are “far from out of the woods yet”.
The EU was due to launch counter-tariffs on targeted US imports from next Tuesday. “We want to give negotiations a chance,” European Commission president Ursula von der Leyen said. Unabashed, the US president is still spinning the result as a stroke of genius after markets rebounded.
But claims that this was all part of a calculated plan have been greeted with derision. Let there be no mistake – the reversal was the result of panic. If bravado, bluster and bluff are not recognised as collateral by bankers, they are viewed as brazen affronts in the context of America’s $28tn (€25tn) treasury bond market.
Alarm that investors spooked by Mr Trump’s all-out attack on global trade were jettisoning US government bonds shocked the financially literate among his cohort into action. With waves now crashing over the walls of what is regarded as the safest harbour in global finance, another Canute-like response was not going to turn the tide. This was a complete capitulation, even if Mr Trump’s team tried to present it as a celebration.
Particularly worrying for Ireland is the fact that special tariffs on pharma remain on the table Unfortunately, while the threat of a full-on transatlantic trade war has receded, it is far from gone. China has vowed that it will “follow through to the end”, and no one has ever profited from betting against resolve in Beijing. Prices will rise, supply chains will break down and shortages will hit industrial output.
It has been said that for every credibility gap there is also a gullibility gap. The antics of Donald Trump over the past few days have managed to widen both. As Mr Martin said, the only certainty at the moment is more uncertainty.
Particularly worrying for Ireland is the fact that special tariffs on pharma remain on the table. Before announcing a pause in the EU’s counter-tariffs, Ms von der Leyen warned they could be brought back in, saying: “If negotiations are not satisfactory, our counter-measures will kick in.” When the tariff wall first went up, Ms von der Leyen responded with dignity, saying: “I know that many of you feel let down by our oldest ally.
Yes, we must brace for the impact that this will inevitably have. Europe has everything it needs to make it through this storm. We are in this together.
” There are serious lessons to be learned from this crisis if Mr Trump is prepared to heed them. One is that the US is stronger with allies than without them. Another is the folly of underestimating the enduring power of markets to destroy their standing.
Successful leaders do not conflate high visibility with high performance. They work from a premise that the future can be better than the present. In wielding their power, they are at pains to at least leave things no worse.
All we know `for now is that this is far from over..
