Government sees corporate tax as main threat from Trump

The Government has moved quickly to open relations with the incoming administration of United States president-elect Donald Trump.

The move was reciprocated by Trump, who invited the Taoiseach to visit Washington for the usual St Patrick’s Day meetings during what was one of his first conversations with foreign leaders after the election result.

The Taoiseach, and other Ministers, had been critical of Trump during the campaign, more or less openly supporting his rival Hillary Clinton. Their distaste for Trump arose mostly because of his comments about women and the attitudes he displayed towards racial minorities in the course of the long presidential campaign.

Likely conflict

Like their counterparts in every other country, Irish government officials are rapidly evaluating the Trump policy platform and the likelihood of its implementation. They are reporting to their political masters that a Trump presidency presents likely conflict with Irish and European Union positions across a wide range of areas, from climate change to international trade, immigration and international co-operation.

Possibly the most common theme in Trump’s campaign when it came to foreign policy and international relations was that the US was being “ripped off”.

The trade agreements the US has agreed were giving everyone else a great deal and the US a raw deal, he argued, saying he would repudiate them, renegotiate them, fix them, whatever.

Similarly, in its alliances in the world – with Nato countries, Japan and South Korea – the US was again being ripped off, he argued. In future, US allies should pay for protection by the US military, Trump asserted. He didn't just say this sort of thing occasionally: he said it all the time.

Dubliner Tom Wright, a fellow at the Brookings Institution, a leading Washington think tank, has conducted an in-depth study of Trump's pronouncements on foreign policy. He has presented his findings in a series of articles and essays, and spoke at a high-level seminar on the next US administration organised for senior officials in Dublin during the summer.

Wright has written that it is a mistake to assume that Trump’s foreign policy pronouncements were essentially made up on the hoof. Rather, he says, they reflect a world view that has been consistent for many years – and is therefore more likely to be implemented during a Trump presidency.

Three themes

Trump’s view of the US’s place in the world revolves around three general themes, Wright has written. Trump opposes US alliances (from which he believes the US gets little in return), opposes trade deals (ditto) and supports authoritarianism. All three themes have strong potential to clash with Ireland’s interests and existing policies.

In general, the threat to international free trade and the US-backed international order present an obvious threat to Ireland's interests as a western country which trades with the world. Trump's admiration for authoritarian regimes does not have a direct impact on Ireland but clashes with the values the State has espoused since its foundation.

According to people familiar with the Government’s analysis of Trump’s positions, the biggest potential problem is his promise to reform the US tax system to bring US companies home.

In addition, if he withdraws from the OECD’s efforts to combat international tax avoidance, the EU is likely to take up the mantle, something about which Ireland is extremely wary.

Most observers believe the proposed US-EU trade deal, TTIP, is now dead. But it is the bigger picture of international free trade that more worries Ireland. By withdrawing from agreements and seeking a series of bilateral agreements, one official says, Trump could wreck the international system.

The Government has only recently ratified the Paris climate-change agreement, though that is also thought to be under severe threat now. Trump has promised to withdraw from its obligations, and officials simply do not know if the EU would seek to maintain a deal without the US.

The Government is also nervous that Trump’s ambivalence towards Nato could prompt the EU to seek to intensify defence co-operation, something to which this country has been traditionally allergic. “That would raise questions which we’d rather not have to address,” said one Government insider.