Donald Trump’s love of tariffs as an economic tool is no secret. The self-proclaimed ‘Tariff Man’ imposed his ‘America First’ policies during his last presidential term, exacerbating a heated trade war between the United States and rival global powerhouse, China. Alongside his running mate JD Vance, Trump is looking to turn the heat up on tariffs once again. Whilst his 60% blanket tariff policy on Chinese imports are now extremely well documented, his 10% tariffs on all other imports have been slightly overlooked, and they impact certain countries more than others.
A tariff is a tax that is imposed by a country on specific, or all, goods and services imported from a foreign country to increase tax receipts or to protect domestic industries by discouraging consumers from purchasing foreign goods that are potentially cheaper to produce. Trump has long been critical of the People’s Bank of China’s interference with foreign exchange rates. Due to their export-driven economy, the PBOC prefer stable exchange rates to aid international trade, and to ensure their worldwide competitiveness. Trump’s proposed economic plans are in response to this, but his 10% worldwide tariff impacts countries that are reliant on US trade, such as Ireland.
Ireland has historically had strong cultural and economic ties with the US. According to the International Trade Administration, the US-Ireland commercial relationship exceeded $1 trillion in 2022. However, Ireland’s over-reliance on the US as a trading partner results in a large election worry from across the pond. Ireland exported $58.83 billion worth of products to the US in 2023, which accounted for 28% of all Irish exports. This is larger than their next two largest trade partners combined, with the United Kingdom and Germany accounting for a total of 22% of Irish exports. This is particularly dangerous when you consider that Ireland is a net exporter, with current exports as a percentage of GDP being 134.41%, whilst imports are at 95.03%.
A 10% tariff on Irish goods will result in Irish firms having to make the tough choice between price and competitiveness in the US market, potentially forcing many Irish firms out of the US market. This could act as a wake-up call to Irish politicians and businesses as trade diversification seems necessary. In 2018, Trump imposed a 25% tariff on steel imports from the European Union, affecting Irish businesses, employees and consumers due to EU retaliations, such as the imposed tariff on whiskey.
Despite growing concerns about over-diversification, Ireland’s Minister for Enterprise, Peter Burke, recently traveled to the U.S. to strengthen business ties across the West Coast. However, the future remains uncertain. While Vice President Kamala Harris currently leads slightly in the polls, it is unclear whether Trump and Vance will win the election or implement their aggressive trade policies. Many economists, including 16 Nobel laureates, have expressed concern about the potential negative effects of these tariffs, warning that increased costs could lead to inflation, a dangerous prospect for an economy still recovering from the pandemic.
Written by Paul Brady
Produced by Madhav Bhimjiyani