World markets were mostly lower today as the latest salvo of threats in the US tariff wars kept investors on edge, though there were still hopes it would prove to be mostly bluster by President Donald Trump.
President Trump on Saturday said he would impose a 30% tariff on most imports from the EU and Mexico from August 1, even as they are locked in long negotiations.
Investors have become largely inured to Trump's chaotic policy methods and stocks eased only moderately, while the dollar gained little on the euro.
Some investors and economists have also noted Trump's pattern of backing off his tariff threats or TACO - Trump Always Chickens Out.
However CEO at the Irish Exporters Association Simon McKeever warns the threat needs to be taken seriously.
"You're dealing with an extremely erratic president in the United States, where the only track record that he has is of being extremely erratic," said Mr McKeever.
"Is it 10%, is it 30%? It is, of course, a negotiating tactic, but we would be very foolish not to take it seriously. It is threatening 30% with making sure that a lower level is accepted by the other side, it's bullying tactics really," he stated.
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The current 10% tariff imposed on US imports from Ireland and the EU remains in place, with less than three weeks to negotiate a trade deal or framework.
This uncertainty creates a new challenge for Irish business owners, many of whom have negotiated deals based on the 10% rate.
"It was widely expected that there was going to be a deal over the weekend and a lot of companies that are exporting into the US had reached an agreement with their buyers and their outbound supply chain on the sharing of that tariff up until now, so its not helpful for them," said Mr McKeever.
"A lot of companies have placed a lot of product into the states in advance of this deadline over the weekend, they're faced with what we do now do, do we renegotiate, and do we start sending more product in?
"The difficulty for them is that there's so much product in there at the moment, that if there is a slowdown in the United States, which has been expected over the summer, then any more product that might go in might not be sold."
Mr McKeever is concerned by the latest set of figures coming out of the US with indications there is a slowdown in the economy, inflation in the last two months has gone up slightly, and there is a slowdown in the labour market, particularly in the manufacturing sector.
"It's very fraught times for Irish exporters and whether it's a 10% or a 30% tariff, they're also dealing with a very weakened dollar, so that puts about a 15-16% on top of any tariff that might come out," he said.
"30% would would be really bad for any company in the European Union and obviously in Ireland as well, it would be awful for us," he added.
Additional reporting by Reuters
