The "biggest near term risk" to the Irish economy is the election of Donald Trump to the US Presidency, a leading economist has warned.
Dan O'Brien, chief economist at the Institute of International and European Affairs (IIEA), believes Irish jobs could be at risk if Mr. Trump is victorious on November 5.
In stark contrast, Mr. O'Brien has suggested the election of Kamala Harris as the 47th President of the United States could in fact be good for Ireland.
Mr. O'Brien told BusinessPlus.ie he expected there to be a level of continuity if Ms. Harris is elected but he also described the Vice President as a "less pro business candidate."
Harris has said she would raise US corporation tax from its current level of 21% to 28%.
Trump previously slashed the corporate tax rate to 21% from 35% and implemented other tax breaks that are set to expire next year.
Harris has said the move would be "a fiscally responsible way to put money back in the pockets of working people and ensure billionaires and big corporations pay their fair share."
It is also estimated the move would reduce the US deficit by $1 trillion over a decade.
US Vice President and Democratic Presidential nominee Kamala Harris. (Getty Images)
However, Mr. O'Brien has forecast that there may also be an upside for Ireland if a would-be President Harris follows through on her promise.
"Harris has talked about raising corporation tax back to 28% which would widen the corporation tax gap between Ireland and the US," he said.
"As a result, you may see more US corporations looking to invest outside of the country."
However, the prospect of Donald Trump returning to the White House was described by Mr. O'Brien as the "biggest near term risk" to the Irish economy.
Trump has proposed a general tariff of 10% and 20% on all imported goods in order to drive investment into the US and bolster domestic industry.
"It is a big worry to my mind that he has made very clear statements around tariffs," he explained.
"The last time the US introduced large tariffs on everything was in the 1930s which was a contributing factor to the Great Depression.
"I'm not saying that is going to happen but putting a blanket import tax on everything would be a momentous moment in world trade.
"Ireland is the country most exposed to the US in Europe so it would have a very significant impact for us, the only question is how bad would it be."
Mr. O'Brien said the US had over its 250 year history been "quite protectionist" and argued the period of open global trade since the Second World War has in fact been "unusual."
He said it was definitely the view in the US that it was a mistake to allow China to join the World Trade Organisation in 2001.
However, he said policymakers on both sides of the political aisle in the US were starting to turn away from the view that global trade was good for the US.
"I think they will eventually clamp down on US companies booking their profits abroad so will change the tax code to clamp down on it," he said.
"The view will be Uncle Sam is missing out on billions in tax so the tax laws will be changed to disincentivise it happening."
Mr. O'Brien warned Irish jobs will be on the line if US companies such as those working in the pharmaceutical sector are forced to move their manufacturing home.
He said if a trade war with the US emerges it is vital Ireland plays a key role in how Brussels decides to respond.
"If the US imposes trade tariffs there is very little we can do but you can be sure Brussels will retaliate so they know this is not a cost free thing to do," explained Mr. O'Brien.
"It is important we have an influence on how any response from Brussels is designed."
Asked if he believes Mr. Trump would follow through on his threat to impose tariffs Mr. O'Brien said: "It is a parlour game to look into the mind of Mr Trump but if he explicitly says he is going to do something then I would take that very seriously."
*This article was originally published on BusinessPlus.ie.
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