When Donald Trump presented his so-called Liberation Day tariffs in April last year, he did so with the aid of a flimsy-looking cardboard chart.
It was the kind of prop a bookie at a racetrack might use, not the US president for a landmark policy initiative.
The list of targeted countries included two uninhabited Antarctic islands. The Heard and McDonald Islands, accessible only via a two-week boat voyage from Australia, are populated by penguins and seals.
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The administration’s baffling tariff formula hit Lesotho – a small improvised African nation of two million people that exports just €200 million worth of goods to the US – with the highest 50 per cent rate.
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What we were witnessing back then, and what we are witnessing now with the US supreme court ruling striking out these tariffs, is the organisational chaos of the Trump presidency.
Erratic, impulsive policymaking that creates volatility and unpredictability.
German chancellor Friedrich Merz this week described the constant uncertainty around US trade policy as a “poison” for the economies of Europe and the United States.
Could Trump’s new global tariff scupper the US-EU trade deal?
First up on this week’s Inside Business are US tariffs. Last Friday, the Supreme Court there ruled that Donald Trump’s tariffs from last year via emergency legislation were illegal. Trump responded by introducing a 10 per cent global tariff under separate legislation. So, what does this mean for Irish exporters? And what does it mean for the trade deal agreed last year with the European Union?Cliff Taylor of The Irish Times has been writing about the tariffs decision while Pat Rigney of the Shed Distillery exports gin and whiskey to the American market, which is a huge part of his business. They explain the Supreme Court’s decision and outline what the position is right now for Irish exporters in terms of how much they will have to pay in tariffs. Also on this episode, we look at the Central Statistics Office figures published last week that showed the number of employees working remotely declined for three successive quarters to the end of 2025. Although just shy of 1 million workers are still working from home. Louisa Meehan is a HR expert with Woodview HRM and she joins host Ciarán Hancock on the line to tease out whether the tables have turned on hybrid working or if this is just a statistical blip. Produced by John Casey with JJ Vernon on sound.
The US supreme court ruled that Trump’s tariffs overstepped the powers the US Congress granted under the 1977 International Emergency Economic Powers Act, the legal workaround he used to deploy tariffs in the first place.
It was a weak branch from which to hang your main economic policy from.
The US constitution is unambiguous about keeping tax-raising powers – “the power of the purse” – within the gift of the country’s main elected body, Congress, so the court’s ruling wasn’t entirely unexpected.
The whole edifice of Trump’s agenda to date – his tariffs, his military incursions in Venezuela and Iran, has been predicated on using emergency powers to bypass Congress.
After the ruling, Trump changed lanes, announcing a temporary global tariff of 10 per cent under a different emergency statute, Section 122 of the 1974 Trade Act which was designed to deal with “international payments problems”. They came into effect on Tuesday but expire in 150 days.
Trump had signalled the rate would be increased to 15 per cent, but it was unclear when and if this would apply.
Critics claim the president is misreading the 1974 legislation which relates solely to financial imbalances, not trade imbalances, and that this too will be struck down by the courts.
In an opinion piece in the Financial Times, the architect of Trump’s tariff strategy, his trade counsellor Peter Navarro, bizarrely claimed that the statutory footing beneath tariffs “is now clearer” as a result of the ruling.
He and others have mooted the possibility of expanding the administration’s use of section 232 of the 1962 Trade Expansion Act which is already being used to impose sectoral tariffs including the 50 per cent tariff on EU steel and aluminium (albeit with carveouts). The latter wasn’t affected by the court ruling.
The possibility of invoking section 301 of the 1974 Trade Act which allows for unlimited tariffs to be imposed for four years against countries deemed to be involved in unfair trade practices against the US has also been mooted. The latter, however, requires a formal investigation and evidence of “unfair practices” first.
Bowl of spaghetti
Trump’s attempt to circumnavigate Congress is beginning to look like a bowl of spaghetti.
The new 10 per cent replacement tariffs, their shaky legal pretext, raises fundamental questions about the trade deals Washington struck last year, specifically whether it breaches the legality of the EU-US trade agreement.
The European Parliament on Monday postponed for a second time a vote on the deal pending further clarity.
“Nobody knows what will happen ... and it’s unclear if there will be additional measures or how the US will really guarantee” its end of the agreement, the parliament’s trade committee chief Bernd Lange said.
EU trade chief Maros Sefcovic took a different tack, urging MEPs to push on with ratification, saying he had received assurances from Trump’s officials in Washington that the agreement brokered last summer remained in place.
The ruling also calls into question the various company-specific deals that have insulated much of Ireland’s export trade from the tariff fallout.
At the end of last year, the White House struck deals with several of the largest US and European-based drugmakers including Pfizer, Eli Lilly and AstraZeneca, which have big Irish operations.
In return for lowering drug prices in the US and promising greater US investment, the companies were given a three-year grace period during which their products would not face planned pharmaceutical-specific tariffs.
Tariff exemptions for aviation, crucial to Ireland’s aircraft leasing industry, are also, excuse the pun, up in the air. While the White House confirmed that civil aircraft, engines and components remain exempt from tariffs, new rates for non-exempt materials sourced from multiple foreign markets could inflate production costs.
Ryanair has €30 billion worth of Boeing 737 Max aircraft orders at stake.
And then there is the thorny question of refunds. The US administration has collected about $175 billion in tariffs since their initial deployment and these are now subject to potential refunds.
Global transportation company FedEx has already filed a lawsuit in the US court of international trade seeking a refund.
New York governor Kathy Hochul on Tuesday called on the Trump administration to issue $13.5 billion in tariff refunds which she claimed had cost the average New York household an estimated $1,751 in added costs over the last year and harmed the state’s small businesses.
Any other political leader would have been forced to resign by now in the face of such a shambles.
That’s little comfort for the companies scrambling to stay on the right side of Washington’s erratic trade policy.
They now find themselves right back at square one on the tariff chess board, not knowing which rates, if any, apply.
`Await some clarity’
Employers’ group Ibec gave an unusually bleak assessment.
“There won’t be any relief for business from this news,” the group’s head of national policy and chief economist Gerard Brady said. “From an Irish and global economic perspective, companies have no choice but to continue to trade through these questions and await some clarity from the US,” he said.
A spokesperson for Ornua, maker of Kerrygold butter (a big seller in the US), said the company was “awaiting clarity”. Butter was already subject to tariffs of about 15 per cent before Trump’s ones. It’s unclear if the new 10 per cent additional tariff is layered, potentially bringing that to a corrosive 25 per cent.
The latest debacle is another glaring example of how the appeasing strategies of the EU and the UK have delivered very little and how the more hard-nosed stances adopted by China, India and Brazil haven’t worked out too badly.
An examination of Trump’s new tariffs by independent trade monitoring body Global Trade Alert found that Brazil will enjoy the biggest reduction in average tariff rates – falling by 13.6 percentage points – followed by China and India, with a 7.1 per cent and 5.6 per cent reductions while traditional US allies – the UK, the EU and Japan – will suffer the largest hit.
The primary aim of Trump’s tariffs is to restore domestic manufacturing. The US has lost up to five million manufacturing jobs since 2001, the year China joined the World Trade Organisation.
The decline has been unprecedented by US standards and has created, or at least compounded, what’s often referred to as a rust belt from the midwest to the Great Lakes, an area that spans from western New York to Michigan and north Illinois and encompasses states like West Virginia, Ohio and Indiana.
It was once the backbone of US industry, but it has now become synonymous with economic decline, population loss and urban decay. Trump spent a lot of time in the area talking about US trade and China in the build-up to the 2016 election.
While some US manufacturers say tariffs have helped, others, particularly those that use steel and aluminium (subject to steep import taxes since June last year), say the opposite.
Trump’s tariffs also aim to correct the country’s big trade deficit with the rest of the world.
But US goods imports continued to outpace its exports last year, sending the country’s trade deficit to a new high.
The gap between the value of goods imported into the US and US exports widened by 2.1 per cent last year, hitting roughly $1.2 trillion, official figures from earlier this month show.
There is a lot of noise in these numbers, however, as businesses last year rushed to get inventory into the US ahead of Trump’s tariff announcements.
Affordability
A more immediate problem for the Trump administration is the impact of tariffs on inflation. The affordability challenge is arguably the biggest political dynamic in the US right now.
Headline inflation in January fell to 2.4 per cent, the lowest reading since May last year, on the back of lower energy prices.
But economists at Harvard University have estimated that tariffs in 2025 boosted US consumer price inflation, relative to where it would have been, by 0.92 percentage points as of January 2026. The research illustrates how tariffs are being paid by US businesses and consumers rather than foreign exporters as some in the White House have contended.
The fallout from the latest twist in the tariff narrative is difficult to predict. Trump has warned countries that trying to suspend or renegotiate their trade deals in the wake of the supreme court ruling would risk provoking even higher tariffs.
“Any country that wants to ‘play games’ with the ridiculous supreme court decision, especially those that have ‘Ripped Off’ the USA for years, and even decades, will be met with a much higher Tariff, and worse, than that which they just recently agreed to. BUYER BEWARE!!!” he wrote on Truth Social.
But even if governments do not publicly drop these agreements, they can quietly slow their implementation.
US trade representative Jamieson Greer signalled over the weekend that the White House expected to open new Section 301 unfair trade practices investigations on several countries, a legal step which in theory would allow it to threaten new tariffs.
Either way the path forward is steeped in uncertainty with the EU pressing pause, China urging Washington to scrap its tariffs and India postponing trade talks with the US.
Pat Rigney, founder of Shed Distillery, maker of Drumshanbo Gunpowder Irish Gin, which exports gin and whiskey to the US said the combination of tariffs and a weaker dollar – the currency is down 10-15 per cent against the euro – has created a very challenging situation for exporters.
He told The Irish Times Inside Business podcast this week that his company had passed on less than 5 per cent of the original 15 per cent tariff rate to consumers in the US in a bid to maintain market share.
“We’re in a unique position ... we can play the long game ... other brands have gone up by significant amounts and they’re feeling it ... you’re hearing about some significant pushback from consumers in the US, some significant declines,” he said, while noting the company’s importer will be seeking to clawback the tariffs already paid.
US trade policy is becoming ever more complex and, as Ibec said, companies have little choice but to trade through the uncertainty.
