Next fortnight crucial for Ireland amid US tariff threats

RTÉ News​

a day ago

There's no doubt US President Donald Trump's threat of 30% tariffs is a significant blow to both the European Union and Ireland.
Earlier this week, Taoiseach Micheál Martin expressed hopes that Brussels and Washington could agree a framework deal which would pause any escalation in trade tensions.
But Mr Trump's letter to the EU, dated last Friday, suggests a positive short-term arrangement is less likely.
The next two weeks will be crucial for Ireland and the EU.
In the immediate term nothing changes - tariffs of 10% are still being imposed by the US on EU goods.
The exceptions remain the pharmaceutical and computer chip manufacturing sectors, both enormously important to the Irish economy.
Mr Trump's announcement now raises the damaging prospect of 30% tariffs being imposed if a deal is not reached by 1 August.
His intervention to make the threat in the middle of EU-US negotiations has sent shockwaves through European capitals.
European Commission President Ursula von der Leyen has warned of "proportionate countermeasures" if the US hikes its tariffs on imports from the EU.
There is no guarantee Mr Trump will follow through on his ultimatum on 1 August - the deadline has already been shifted from 9 July.
Nor is there any certainty the rate will be 30%. Previously, he has suggested tariffs of 20% and 50% on EU goods.
The EU's position is to remain calm and continue negotiations - while turning up the rhetoric on the likelihood of reciprocal countermeasures.
But for Irish exporters, the lack of certainty is now even more pronounced.
Businesses don't know when to expect increased tariffs or what the rate might be.
This unpredictability undermines the business rationale for making further investments - and further investments equal jobs.
In parallel with the threat of 30% tariffs, the US is investigating trading arrangements for the pharmaceutical and computer chip manufacturing sectors.
Nobody can presume their escape from tariffs to date will remain the position in future.
Tomorrow morning, stock markets and bond markets will reopen - their response to Mr Trump's burst of letter-writing will be crucial.
In April, when the markets took fright at the US president's tough talk on tariffs, leading to a jump in the US cost of borrowing, he quickly backed down.
Now, however, the political and financial environments may have shifted.
His success in having his tax cuts bill approved by Congress may have emboldened him to return to tariff threats on various countries, including EU member states.