DAVY VIEW

President Trump has announced plans for the US to impose sweeping tariffs on the EU from April in an escalation of trade tensions. Cars, semiconductors and pharmaceuticals have been identified for possible additional tariffs, owing to the new US administration’s desire to see activity reshored. This is a clear concern for Ireland given its large reliance on foreign direct investment and a significant presence of US pharmaceutical firms. However, some areas of mutual interest could mitigate the size of tariffs that are ultimately imposed. Large US corporations have benefitted from having a global reach and in some cases large investments made abroad would be costly for them to unwind. Other factors could discourage the suggested policy shifts, including any negative impact of tariffs on US economic growth and an already-large US fiscal deficit.