The visit of US President Donald Trump to Shannon last week may have improved his chances of re-election next year, as he and his sons made the most of the welcome in Doonbeg to flaunt the Irish connection and appeal to the 30 million Irish-Americans back home.
An exit from the White House after one term could see the global economy bounce back, with the prospect that any new US President would rapidly cancel all the Trump-imposed tariff barriers.
A successful election campaign with a continuity of the Trump protectionist approach to international trade, and a continuity of tariffs on goods entering the US, could plunge the global economy into full-blown recession.
In a briefing note for G20 finance leaders ahead of its meeting in Japan over the weekend, the IMF warned of this. It said US tariffs and Chinese retaliatory measures currently in place could wipe €405bn off global growth next year. The statement did not take into account President Trump’s indefinitely postponed latest tariff blast threat to Mexico, which had been due to come into being at the end of last week.
Mr Trump has argued - and tweeted - volubly that the tariffs on Chinese goods, alone, will bring in $325bn (€287bn) to the US Treasury, and will protect US firms from unfair foreign competition.
However, the United Nations trade and development agency UNCTAD has indicated that more than 80% of the trade hit by US tariffs and Chinese retaliatory tariffs will be picked up by other countries and advises that tariffs are ineffective at protecting domestic firms.
In a recent report, UNCTAD estimated that of the $200bn in Chinese exports subject to US tariffs, 82% will be diverted to firms in other countries in the longer term. US businesses are also set to lose out on their exports to China which will be hit by the retaliatory tariffs. The result, according to UNCTAD, is a dramatic shift in global trade which is consistent across all sectors - from machinery to wood products such as furniture, communications equipment, and chemicals - to precision products such as heart stents, pacemakers and artificial leg and arm joints.
The reasoning is simple: declining trade between the US and China creates a vacuum which consumers and traders seek to rapidly replace by purchasing from businesses in countries not affected by the tariff war. US buyers seek suppliers outside China and vice versa.
The EU is expected to gain most from the displacement of US-China bi-lateral trade , according to UNCTAD , as goods from companies based in Europe have the technical and logistical capability to competitively supply the gap in the market.
It estimated that EU exporters are likely to pick up €62bn of the US-China bilateral trade. Ireland, as one of the main exporters from the EU into the US and with good relationships with China, is likely to get a disproportionate gain.
Whereas some countries will see a surge in exports, negative global effects may arise from specific company isolation - such as in the case of Huawei - rapid commodity price fluctuations, as with aluminium and steel, and the potential of escalation into currency wars and financial market volatility.
The difficulty for Irish-based producers in trying to decide which side of the bread they have butter on, is that a second term for Donald Trump as US president is likely to see a revolving series of trade wars with the tariff pistol turned on Europe which could wipe out any gains we may enjoy while the focus is on China or elsewhere.
- John Whelan is managing partner of international trade consultancy The Linkage-Partnership