Irish exporters should not expect Donald Trump’s tariff policies to be unwound when the US president departs the White House in 2029, an expert on US trade policy has said.
Rohit Kumar, PwC US tax policy services leader, who previously served as domestic policy director and deputy chief of staff to then-Senate Republican leader Mitch McConnell, said Trump’s tariff policy “may have more durability than just his term”.
Under the terms of the deal struck last July, the US imposes tariffs of 15 per cent on most European Union goods.
Irish goods exports to the US fell by 82 per cent in March as volatility linked to the tariffs continued to weigh on the State’s trade numbers. The value of goods exported to the US dropped from €25.5 billion in March last year to €4.5 billion this year, official figures show.
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The sharp fall-off reflects the unwinding of last year’s export surge when firms stockpiled product in the US to avoid tariffs.
Ireland’s merchandise trade is dominated by big pharma, which has so far escaped US tariffs, but Trump last month threatened to impose 100 per cent tariffs on pharma companies exporting into the US if they reneged on a deal to reduce drug prices in the US.
“Wherever we land at the end of the Trump administration, my sense is that level of tariff is likely to be around for a while,” Kumar said in an interview with The Irish Times.
“Regardless of who the next president is, I don’t think we should expect they will revisit every aspect of Trump’s tariff policy, whatever they inherit in January 2029.
“A useful reminder is that president Biden inherited a fair bit of tariffs from Trump’s first administration and didn’t really undo those.
“In fact, he added some more of his own along the way and we ended up with more tariffs at the end of the Biden administration than we had at the end of the first Trump administration.”
Kumar said the situation boiled down to “the political environment” in the US. “This is where the US body politic is headed,” he said. “It is not a purely partisan exercise.”
Business group Ibec this week said US multinationals had told it how Trump’s flagship tax legislation has made the US “significantly more attractive” for investment and that the Republic must work “an awful lot harder” to compete.
“Trump’s Bill was designed to make the US a more attractive place for investment – both domestic investment and inbound investment – and there has at least been some evidence that it is working,” Kumar said.
“The exodus of investment from the US has stopped. Before 2017, it was not uncommon for US-headquartered companies to be relocating their headquarters to other jurisdictions, including Ireland.
“The US is trying to become a more competitive place to attract investment. Ireland has had great success doing that over the years, so it’s only natural Ireland would pay attention to what the US is doing.”
Kumar said the picture could worsen further for Ireland should the Republican Party retain its majority in the US Congress after November’s midterm elections.
“While it’s not the most likely scenario, it is certainly not out of the question the Republicans would retain the House of Representatives and the Senate,” he said.
“Were that to happen, there will be an innate desire among congressional Republicans to pursue additional tax legislation or economic policy legislation in 2027. Depending on how that shakes out, Irish interests may be implicated.”
