Dr. Tom McDonnell:

The question as to the options Ireland has and whether Trump will retaliate is a good one. First, he has retaliated and has always upped the ante, but it has often been for very short periods. That suggests it is a negotiating strategy rather than something he necessarily thinks is a final landing position. It makes sense to me as a bargaining position, from his perceived position of strength, to say that he will hit us with 30% unless we give him X, Y and Z. That may be the case all the way up to a final deal. It is completely natural, particularly given his background and the industries he worked in. It is important not to necessarily always take his threats as what he intends to do. It is best to step back and look at what our cold interests are. The medium- to long-term interests for the EU and Ireland are that there be no tariffs at all. There are a number of different theories in game theory, but one of the most successful strategies for game-playing is to always play nice until somebody hits you and then you hit them back and you keep hitting them back until they stop hitting you. That goes for board games, financial markets, war games or whatever. If they push back, then you continue to act nice going forward. This suggests that you will play hardball, at least in the short term. I am talking about the EU first, and then Ireland. You play hardball in the short term in the hope of getting rid of tariffs altogether. However, as I said earlier, it is a very high-risk strategy because we are dealing with somebody who is not necessarily consistent and who acts emotionally rather than rationally, to put it that way. When you are dealing with somebody who is acting emotionally, the standard strategies do not necessarily always apply. If Ireland and the EU decide they will just let the US have its tariffs, there is not necessarily any incentive for Congress to give up on those tariffs in 2027 or under a new President in 2029. That is the new norm. They would want something in return. However, if we have tariffs in place, it creates a lever or an angle for them to play it as a victory and say in 2027 that they have got rid of the tariffs on US goods. There are a number of reasons why you might adopt the aggressive strategy, but there is no doubt that Ireland is exposed. While I stated that, by itself and with nothing else changing, it would not be enough to cause a recession or a fall in employment from their current levels, if you are still talking about 50,000 fewer jobs created, that is an enormous impact. There are also obviously the public finance Estimates and so on.