Bruton warns Trump presidency would be bad for global trade

As polls show a tightening in the US presidential race less than a week before polling day, former taoiseach John Bruton has said a Donald Trump presidency could lead to a global trade war that would hurt Ireland's interests.

Mr Bruton, who served as the EU’s ambassador to the United States for five years during the Bush and Obama presidencies, warned that the office of US president would give broad power to Mr Trump to implement the sort of trade barriers he has promised on the campaign trail.

"Trump could impose his 45 per cent tariff on Chinese imports and 35 per cent on Mexican imports pretty much straight away," said Mr Bruton, speaking on The Irish Times Business Podcast.

“I think we could have a trade war if he does the things he says he’s going to do, because others will retaliate. Europe is very dependent on demand from China. If the Chinese are hit very hard with the tariffs Trump is threatening them with, that could lead to all sorts of negative consequences,” he said.

Mr Bruton added Ireland could also take a hit if a Trump presidency fulfilled his promise to lower corporate tax rates drastically and simplify the corporate tax code, leading to less US company profits being booked in Ireland.

Also speaking on the podcast, US economist Megan Greene said corporate America could benefit in the short term under a Trump presidency by avoiding tax increases that would be likely if Hillary Clinton were to win the White House, but that the American economy would suffer longer-term consequences.

‘Magic’ growth

“He’s hoping to pay for a whole bunch of fiscal stimulus with magic 5 per cent or 6 per cent growth” that is unlikely to be achievable, said Ms Greene. “In the longer term, a Trump presidency would be bad for growth and so would undermine corporate America”

On the question of undocumented migrants, Mr Bruton said he expected neither candidate to achieve reforms that might help Irish citizens in America.

“I don’t think Hillary Clinton will seriously try. On the other hand, Donald Trump has said he will deport two million of the 11 million [undocumented migrants].

“Forcible deportation is something that should make one shudder.”

Irish-American lawyer and NUIG lecturer Larry Donnelly said Clinton "would be better poised and better able to help the undocumented Irish".

“President Obama signed an executive order which would have at least improved the situation of a lot of undocumented Irish,” he said. “That’s been held up and struck down in the courts. Hillary Clinton has signalled the intention to reinvigorate and constitution-proof the issues around that order.”