The result of the US election was in large part a reaction by many working-class people who feel betrayed by globalisation and the free-trade agreements they believe have closed their factories and given their jobs away to Mexico and China, as well as Ireland.
Mr Trump’s nomination as the next US president shocking to many of us in Europe, is music to the ears of laid-off factory workers and farmers in many states and particularly swing states such as Ohio.
His apocalyptic tones throughout the election rallies did strike with their experiences on the ground.
The Republican president-elect may find it hard to deliver on his threat to “tear up” the North American Free Trade Agreement — NAFTA — and impose steep tariffs on imported goods, and cut US corporation tax to 15% in his quest to deliver jobs to the forgotten regions of the US.
However, the collateral damage that he may cause in pursuit of his promises is worrying for many businesses that trade with the US.
Whatever about Mr Trump being able to follow up his anti-globalisation rhetoric, he will certainly be able to ensure his next trade secretary kills off any further negotiations with the EU on the Transatlantic Trade and Investment Partnership agreement and inking the Trans-Pacific Partnership trade agreement with Asian countries.
Of much greater concern to both US multinationals based here and Irish indigenous businesses exporting to the US, is a threat to impose import tax levies on goods and services entering the US.
In Ireland’s case, we are facing an unprecedented and potentially crippling blow to traders, if a 45% import tariff were applied to our exports to the US.
Last year, Ireland’s exports to the US reached €26bn, covering everything from pharmaceuticals and medical devices to Coca-Cola ingredients and Jameson whiskey.
Any tariff will damage this trade, but anything in the order of a 45% import tax would kill off most of this trade. Another threat from the Trump victory is the impact of introducing 15% corporation tax.
Ireland has been able to attract many US multinationals that needed a base in Europe to service their growing markets across the EU.
A key element of the decision process to locate here, as opposed to anywhere else in Europe, has been our 12.5% tax, well below the 30% average rate across the EU.
This lure loses its attraction, if the US brings in a 15% tax rate.
Many will argue there were signals the current corporation tax rate of 35% would be cut in time to overcome the perennial reluctance of US global corporations to repatriate their profits back to the US and pay their taxes there.
There is no doubt that in an attempt to deliver at an early stage on some of his big promises, president Trump will opt for a dramatic and immediate reduction to the 15% level.
The Trump victory with its protectionist agenda, coming on the heels of the Brexit decision, has created widespread uncertainty and is likely to push global trade into a slump.
Clearly, Mr Trump’s win reflects the heartfelt frustration of many Americans, who were deeply hurt by the recession. But to characterise globalisation as the disease, and protectionism as the cure, is wrong.
Irish companies investing in the US have created the same number of jobs in the US as US investments have created here. In all, foreign direct investment into the US from across the globe has created 24m jobs there.
If he sees his mandate to reverse globalisation, then Ireland and other open economies will suffer.
John Whelan is a leading international trade consultant.
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