To use an American phrase, “I’ve seen this movie before.”
Sequels, of course, are always different – for better or worse – but they usually contain traces of continuity. That’s the case with the second Trump administration. I watched the first instalment up close, during my time as ambassador in Washington.
Its main character is now more experienced and looms larger than before, thoroughly overshadowing a supporting cast of political minnows. Donald Trump runs perhaps the most personalised presidency in American history.
The atmospherics at the Trump inauguration suggested that the new administration might lean towards the ‘tech bro’ mantra of “move fast and break things”. That has turned out to be the case.
The president has sought to take an axe to the global trading system with a view to remaking it to America’s benefit. We have witnessed stock market carnage but, as former UK prime minister Liz Truss discovered, moving sharply and breaking things tends not to sit well with the global bond market. Democrat adviser James Carville once cheekily quipped he would want to come back as the bond market because it can intimidate anyone.
The past months have had it all – and not in a good way. Domestic and international norms have been upended.
We’ve had tariff announcements and row backs, a dizzying rush of twists and turns. Multiple trade negotiations are under way, but it would be naive to expect trading arrangements to go back to where they were before Trump’s second coming.
From an Irish point of view, the threat of further tariffs on pharmaceuticals, and possibly semiconductors, is all too real.
So far, the EU has responded prudently in an effort to avoid escalation, but its restraint cannot last indefinitely. It could ultimately feel obliged to wield a big stick and retaliate with levies against US companies active in Ireland.
Ireland’s economic model is under strain, beset by the uncertainty, unpredictability and volatility of the present moment. It may be that the golden age of transatlantic relations has waned, and not just for Ireland.
The Nato alliance which has helped keep the peace in our part of the world for seven decades has frayed and European leaders see a need to build autonomous European security arrangements. That would raise profound questions for us.
While these are undoubtedly testing times for the Irish economy, we do have assets to call on, most notably our EU membership and the positive ties we continue to enjoy with the US reflected in the Taoiseach’s St Patrick’s Day visit to Washington and the Tánaiste’s more recent engagement with US Commerce Secretary Howard Lutnick.
We should continue to rely on the ‘Team Ireland’ approach that has served us well over the years in dealing with the fallout from the Great Recession of 2009-11, with Brexit and with the economic effects of the pandemic.
Our state agencies and our diplomatic network have a major job to do in defending Irish interests. The three-month pause on the imposition of US tariffs provides a space for the EU Commission to carve out a deal with the US and for Ireland to work within the EU, and in Washington, to ensure our particular set of interests is given the attention it deserves.
A key requirement will be to ensure that, if tariffs cannot be fully removed, key Irish exports to the US will not be disadvantaged compared with our competitors. In recent weeks, we managed to amend the EU’s list of countermeasures against US steel and aluminium tariffs to exclude American whiskey and thus help avoid a further escalation of US tariffs on alcohol products from Europe.
While we are in a risk-ridden environment, I remain quietly optimistic about the prospects for an EU-US trade deal. Even a behemoth like the US can scarcely afford to risk raging trade disputes with both China and the EU.
We have no control over decisions President Trump may or may not take, but our domestic economic agenda is in our own hands. We can and should use this time to strengthen our national competitiveness and to reform the way major infrastructure projects are managed.
Market diversification ought to be a priority for us, with a renewed focus on the EU single market and on countries with which the EU has current or prospective trade deals. Agreements with Canada and other international partners need to become operational so as to open opportunities for Irish exporters whose access to the US market may be hindered by tariffs.
“While we are in a risk-ridden environment, I remain quietly optimistic about the prospects for an EU-US trade deal”
Developments since the Trump inauguration ought to act as a wake-up call. We cannot rely on past glories to guide future horizons. The Trump administration has been “flooding the zone” through the unrelenting pace of its announcements and the political theatre of the President’s public appearances.
Now would be a good time for us to try to shift the debate from one dominated by tariffs and threats to one focused on what Ireland can do through our own efforts to secure our economic future.
Daniel Mulhall is a former Irish Ambassador to the United States (2017-2022) and is a consultant with Rockwood Public Affairs
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