
The Irish Independent's View: World economy has been left in limbo as Donald Trump sows chaos
The winding down of the payments was inevitable. For one, they were no longer 'once off' – many had started to take them for granted. What should have been targeted and tailored to those who needed them most was accepted with a sense of entitlement by others who might have managed well without them.
Increases in current spending of 8pc to 9pc in recent years will also be addressed. Cutting them back closer to 5pc will pose hard choices in Budget 2026, but the 30pc transatlantic tariff threat has left no room for largesse.
While Mr Trump might be responsible for a wave of restless exhaustion afflicting those charged with managing budgets, he is showing no sign of tiring himself. His enthusiasm for blowing up agreements and scuppering plans never wanes.
The grim news that Brussels plans to impose tariffs on Boeing aircraft, cars and bourbon as part of a proposal for further retaliation against €72bn of annual US imports if trade talks with Washington fail is a further reminder of how close to an all-out trade war we have come.
Taoiseach Micheál Martin has said Mr Trump's hammer blow would have a 'very severe impact' on the economy. The goal must still be to do a deal, but the window for agreement is closing fast. Mr Martin referred to the US/EU negotiations as 'troubling and difficult'.
Tánaiste Simon Harris was equally saturnine, saying: 'If you arrived at a scenario where there are 30pc tariffs, the impact of that is quite extraordinary.'
Last week, Mr Trump warned that pharmaceuticals are also in his crosshairs. The rate for medicines could reach 200pc, but he said he would give drugmakers about one year 'to get their act together'.
How much of this is posturing is hard to call with Mr Trump. Yet tariffs are a double-edged sword. Prices for imported steel and aluminium increased almost 30pc between January and May in the US. So Americans, too, will feel the pain.
Apart from the pressure on costs and the hit people will take in their pockets, the economic uncertainty is having a chilling effect as Mr Trump keeps changing course.
Critical investment decisions are frozen. The politics of protectionism will, at some point, come into play as people feel the pinch. And if firms are forced to scale back as demand falls, jobs will be lost.
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