Brace for impact: a second Trump term is becoming less unlikely

Is there anything to be said for another federal indictment?

Former US president Donald Trump has been on the receiving end of no fewer than three in a short space of time. Yet, with his nearest challenger Ron DeSantis’s campaign close to exploding on the launch pad, the man most likely to be the next Republican candidate for the White House is neck and neck with the incumbent Joe Biden, if recent polls are to be believed.

While there are plenty of twists and turns ahead, lawmakers and trade experts globally are girding their loins for a potential second Trump presidency, a prospect that – despite his legal troubles – is becoming less and less unfathomable by the day.

Worth noting, leaving everything else aside, is the fact that Trump’s first four years in office did have some positive economic impact here, at least indirectly. His administration’s attempt to claw back billions in taxes from US corporations holding intellectual property abroad drove multinationals into the Republic’s arms, contributing to a sizeable jump in corporation tax receipts from €8.1 million in 2017 to €22.6 billion last year.

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But such happy accidents aside, many expect a Trump victory in 2024 to throw more than one spanner in the works for Irish exporters and global trade generally. For example, Ornua, the State’s largest dairy exporter, said in April it was keeping a “close watching brief” on the upcoming US election cycle after being caught in the crossfire of a US-EU trade spat that saw the Trump administration impose tariffs on €6.4 billion worth of European exports in 2018.

For a flavour of what may be coming down the tracks, look no further than a new book by Robert Lighthizer, Trump’s former US trade representative, titled No Trade is Free Trade. It sets out what Politico called “a blueprint for how the former president might expand on the protectionist policies he enacted during his four years”.

Top of the agenda would be a redoubled effort to “decouple” the US economy from China, potentially revoking its normal trading status, reducing it to a pariah state like Russia.

Apart from the geopolitical implications of such an escalation, the economic and trade impact for Europe is likely to be seismic, further straining relations. According to Hal Brands, writing for Bloomberg, “Trump-phobia” is already entering the calculus of European politicians, limiting their willingness “to follow the US into a sharper posture vis-a-vis China”.

While Ireland has a knack for profiting from chaos, a fully loaded trade war between the US and China – with Europe stuck somewhere in the middle – is unlikely to spell good news for Irish companies that export to the US or a global economy that is decidedly more fragile than it was in 2016.