Chambers is right: Trump tariffs are a once-in-a-century event
Public expenditure minister Jack Chambers apparently in upbeat mood after the Government's trade forums with employers and unions on Friday. But his dire warning about the global upheaval caused by US tariffs rings true. Picture: Sam Boal/Collins
"Possibly the biggest impact on trade in over 100 years."
It’s easy to let those words from public expenditure minister Jack Chambers wash over you. Politicians and the media are prone to hyperbole after all, aren’t we?
In the chaotic decade since Donald J Trump established himself as a major player on the global political scene, it is often easier to shut off from his daily and hourly pronouncements, because nothing he says ever feels real.
Mr Trump himself feels like the creation of a simulation, a character built to inhabit the role of US president in fiction, but not reality. It is one of the things that makes him so attractive to so many of his supporters; he does not feel like a real politician.
But Mr Trump’s announcement on Wednesday that the entire world would be hit with minimum 10% tariffs on exports to the US is too big a pronouncement to simply mute. Mr Chambers is right: This is a seismic attempt to reorder a global economic system which has prevailed for the best part of a decade.
While the announcement was not in any way a surprise to the Government here, there is a sense of uncertainty beginning to set in. Which is because of Ireland’s position in all of this. We are extremely exposed to an upheaval in US multinationals’ attitudes, but we are unable to negotiate any agreement alone.
Ireland’s position within the EU complicates a matter which is already extremely complicated in one sense because it means that while France and Germany have indicated a willingness to target US tech giants operating in the EU, that move could have a devastating economic consequence for Ireland.
But at the same time Ireland benefits from being in the bloc purely because without the umbrella of the EU our tariff will be somewhere closer to 40% rather than the EU’s 20%.
All of which is to say that this is not going to be easy or straightforward or enjoyable.
In the aftermath of the announcement, Government sources said they were keenly aware of the impact that tariffs will have on the Windsor Framework, the agreement which finally put the issue of the North in Brexit to bed. The example has been raised of a cheesemaker in Newry who may use milk from across the border. What tariff would that person pay if exporting to the US? Unsurprisingly, the Trump administration has not factored in our imaginary cheesemaker friend into its scenario planning, but even that example highlights just how complex the next few weeks and months could get.
On Friday, senior Government officials held forums with stakeholders around employment and trade with tariffs top of the agenda at both.
While much about Ireland’s overall response through the EU will depend on the outcome of Monday’s meeting of EU trade ministers, senior Government members on Friday asked trade stakeholders for a “detailed action plan within six weeks, which will set out potential avenues for Irish business to diversify and grow in alternative export markets”.
The forum led by Tánaiste and trade minister Simon Harris was also given a presentation on the pharma industry amid concerns that the US may impose sector-specific tariffs in the future.
Mr Trump’s comments on Thursday night that he was looking at pharmaceuticals as “a separate category” and “we will be announcing that in the near future” will have come as no surprise, save for the handful of optimists who had taken their omission from Mr Trump’s initial announcement as a good sign long-term. Speaking afterwards, Mr Harris said that it has to be a “working assumption that US tariffs are here to stay”.
“There is a fundamental shift in the global trading environment,” he warned.
Meanwhile, employers’ group Ibec warned that staff in the drinks industry could be put on shorter working time as soon as this weekend. Its CEO Danny McCoy said there are likely to be staff cuts in the face of the tariffs.
“The reality of the market is just that if your demand is likely to dry up, then you have an excess supply of both product and workers.”
At the earlier plenary meeting of the Labour Employer Economic Forum (LEEF), unions were arguing for bespoke supports for those who will be most affected.
The common thread throughout the day was an uncertainty about just how much pain may be felt.
While all of this was going on, Mr Trump took to his Truth media platform.
“To the many investors coming into the United States and investing massive amounts of money, my policies will never change. This is a great time to get rich, richer than ever before!!!” he wrote in all caps.
You just can’t ignore him, can you?
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