US President Donald Trump is preparing to announce major new tariffs tonight that could potentially derail global economic plans.
Ireland itself has been heavily dependent on exports for its economic growth – with the US being Ireland’s largest export market.
Global investors are close to getting some clarity on the Trump administration’s tariff plans but with little detail on what to expect, financial markets remain on edge.
Asian stocks fell in early trading, after a choppy US session. Japan’s Nikkei slipped 0.3% while Chinese stocks opened slightly mixed. Safe-haven gold was stuck near record highs.
Beyond the tariff news, investors are increasingly worried by signs in the US of rising prices, slowing growth and cracks in the labour market.
From an economic perspective tariffs are bad for businesses, workers and consumers.
Speaking on RTÉ’s Morning Ireland, EY Ireland’s chief economist and partner Loretta O’Sullivan said the indications are that the EU is in the firing line and that we are likely to see an EU general tariff being applied as opposed to different tariffs being applied to different EU countries.
“This would be a source of concern for Ireland as well given our strong trade and investment links with the US, particularly around pharma and beverages,” Loretta O’Sullivan said.
“The EU so far has said that all options are on the table, it has indicated that tariffs are damaging and harmful, but that it is open to negotiations at the same time as having the power to push back on this. Trump too has said that he’s open to negotiations so there’s lots of unknowns,” she said.
“What we do know is that tariffs are a double edged sword, they hurt the countries that impose them and they also hurt the countries that they are imposed on,” she stated.
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“Model simulations would show – our own models by EY and by the IMF – that a global tariff war is a lose-lose situation best to be avoided, but obviously we are in the realms of geopolitics here, not just economics,” she added.
The White House has been closely guarding details of tariffs for major US trading partners.
The big reveal from Donald Trump later will give us a sense of what the lie of the land is and what these tariffs mean for growth, inflation and monetary policy.
“If I was to take a silver lining from all of this it’s that Trump’s economic agenda and the push around deregulation in particular has put a renewed emphasis on the EU’s own competitiveness agenda,” said Ms O’Sullivan.
“We have seen the Commission come out in recent weeks with proposals around removing barriers to the single market, with streamlining, regulation and with looking to unlock private capital which would be good for businesses,” she added.
Additional reporting by Reuters
