As the Electoral College in the US votes to formally confirm Joe Biden's victory in the presidential election, the Irish business community is weighing what the impending change in administration might mean for US-Irish trade relations. The verdict? Despite the new guy's apparent affection for his ancestors' homeland, it could be a mixed bag.
“The change in trade policy under the new administration could best be described as a change in tone and approach rather than a change in focus,” wrote Ibec on Monday in its latest quarterly economic outlook report. The incumbent Donald Trump’s tone is toxic, so any change there is not so insignificant.
But overall, it seems a sea change in the US approach to trade is not expected under Biden.
Some positive change will occur. Ibec highlights that Biden, for example, will be much less likely than his predecessor to use bilateral trade imbalances as a yardstick by which to measure the health of the economic relationship. He is also less likely to try to fight trade spats by hitting the other side with tariffs, and more likely to try to resolve differences through multilateral global bodies. All of this should be good for a small, open economy such as ours.
Irish-made consumer products such as whiskey and food items were particularly vulnerable to the risk of lightening tariffs under the combative Trump administration. The apparent removal of that risk for the future by the election of the more diplomatic Biden is to be welcomed.
However, as Ibec notes, Biden is not completely eschewing Trumponomics. “Large parts of the ‘America First’ strategy is now mainstream in US politics,” it states in the report.
Ibec reminds us that Biden will prioritise US workers in future trade deals, which is hardly a surprise and nothing really to fear. However, he is also expected to introduce tax breaks to encourage US companies to bring home jobs from abroad, which is a direct threat to Ireland’s US-focused investment model.
