1 week Ago
The burgeoning trade war with China, along with the severity of tariffs imposed on other Asian manufacturing hubs such as Vietnam and Cambodia, are already leading to predictions of a drastic reconfiguration of global trade, with fears that Europe and elsewhere could be flooded with cheap Asian goods. The reaction so far from the European Union to the 20 per cent tariff imposed on it has been measured. That is in line with the promise made in advance of Trump’s announcement that the EU would take time to reflect and to negotiate with Washington before deciding on a course of action.
But it also reflects the differing sectoral interests of individual member states, which will not be easily resolved. There is, nonetheless, a broad recognition that Brussels is dealing with a US administration which is actively antagonistic to European interests and wedded to a strategy of economic domination. It appears the EU will have no choice but to reciprocate with tariffs of its own.
For Ireland, with its heavy reliance on US investment, the path ahead is perilous. The Government will do its best to resist French proposals for fresh restrictions on American technology companies. Meanwhile, the reprieve for pharmaceuticals announced on Wednesday may prove brief.
The expectation remains that a rate of 25 per cent or more for pharmaceuticals will be announced in the near future. But the industry has been lobbying hard and could yet persuade the US administration to phase in tariffs to avoid sudden price spikes or drug shortages. That decision could be significant in the short term for Ireland.
But it is the long-term consequences of this week’s events that will prove more important. Responding on Friday to calls for Government support for at-risk sectors, Taoiseach Micheál Martin was swift to reject comparisons between this crisis and the pandemic, when the entire resources of the State were mobilised. Despite the incoherent and self-contradictory manner in which it is delivered, Donald Trump’s America First message is transforming geopolitics and the global economic order.
It would be naïve to think that things will ever return to the way they were. The challenge for Ireland and other countries is how to chart a safe passage through this uncertain new world..
