15th April 2025
As we head towards Easter and following Liberation Day in the USA the topic up for discussion was President Donald Trump’s dismissing upwards of 75 years of global trading systems with the introduction of sweeping tariffs across the board. Our contributor Seamus Gunn was intrigued that there had not been more analysis of the figures and in particular how the tariffs have been computed in relation to trade surpluses and deficits. He was of the view that if they were correct then there could be no surprise in America taking such a course of action but he had his doubts, particularly referencing the situation in Ireland where on the last figures published by the CSO (Central Statistics Office) showed Ireland having a surplus of 70 Billion for goods sold into the USA while the USA had 163 Billion of services to Ireland which he maintained left Ireland in a deficit position of 93 Billion while now being hit with a European tariff rate of 20%.
Greg Hughes referenced manufacturing industries in Asia in the context of the low costs of production, with which the USA could not compete. Gunn referred to the car industry once very strong in Ohio and Detroit and how the industry has suffered over the years to such an extent that it is no longer the automobile centre that it once was. If the game plan was to promote growth in this area, he thought that the labour cost would be prohibitive and there may have to be a rethink on the 25% tariff on cars coming in. A concern was expressed for the ordinary US citizen as to how this will impact in their pockets. The changes to date with the cutbacks in the service industry and now the introduction of tariffs was likely to further escalate the growing disquiet among consumers in the US. Gunn’s view was that the policy was an attempt to have a global open trade market where supply and demand would dictate price. As this will play out in the coming weeks there are many nervous economists watching on.
As ever a wide and varied Q&A followed.