Enterprise minister says Trump can 'change his narrative quite quickly' on tariffs

Markets have reacted very negatively towards US tariffs on Canada and Mexico

Wed, 05 Mar, 2025 - 16:13

Ronan Smyth

With Donald Trump expected to announce tariffs on the EU, enterprise minister Peter Burke has claimed the US president can “change his narrative quite quickly” and is open to negotiations when it comes to the issue of tariffs.

This comes after the US imposed a 25% tariff on imports from Mexico and Canada as well as increasing the tariff on China to 20%. Financial markets have reacted very negatively to the tariffs and are signalling that the risk of a recession is growing due to uncertainty and indicators of economic weakness spreading fear across Wall Street.

Following the downturn in the market, US commerce secretary Howard Lutnick said Mr Trump will announce changes to the tariffs on Canada and Mexico with potential relief for cars and other sectors.

Speaking to reporters yesterday, Mr Burke said “nobody wins” when it comes to a trade war as all it does is “reduce supply” and “cause inflation increases”.

He said that Mr Trump has shown before that he is willing to change his mind on issues and it is up to the Government to ensure the Irish perspective is understood. Mr Burke said:

It is important to understand that Donald Trump, at his core, is a businessman. You can see from the Canadian decision how much he can change his narrative quite quickly.

"So it is important that we point out that we are a country of over 5m people and we are the sixth largest investor in the US."

Mr Burke said they are working closely with the EU in order to be prepared should Mr Trump follow through with his threats.

“It is very uncertain,” he said. “We are told that president Trump will make an announcement in early April and then we have to assess the situation.

“At the moment, tariffs are on hold until April 1. Those were tariffs brought in [in] 2018 and were particular to different states in the US from motorbikes to bourbon, to clothes such as Levi’s.”

Mr Trump has said he intends to put a 25% tariff on imports from the EU with an announcement expected on April 2.

However, additional tariffs could lead to further uncertainty in the markets.

On Tuesday, after US tariffs on Canada, Mexico, and China went into effect, a model from JP Morgan Chase showed that the market-implied probability of an economic downturn has climbed to 31%, from 17% at the end of November.

Key indicators such as five-year US treasuries and base metals are showing an even higher — toss-up — chance of a contraction. While it’s far from the base case, a similar model from Goldman Sachs Group Inc also suggests recession risk is edging up, at 23% from 14% in January.

Speaking to Bloomberg, Mr Lutnik said Mr Trump is thinking about which sections of the market he’ll give some relief to.

“It could well be autos, it could be others as well” that get relief, he said “There are going to be tariffs — let’s be clear — but what he’s thinking about is which sections of the market that maybe he’ll consider giving them relief until we get to, of course, April 2,” Lutnick said.

“I think it is going to be in the middle somewhere.”

Carmaker shares climbed after Mr Lutnick’s remarks, with GM rising more than 5% in pre-market trading in New York.

Ford was up about 2% and Stellantis climbed about 7% in European trading.