John Whelan: Europe's trade negotiators will eye up Ireland's access to Trump's commerce pick
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Billionaire Howard Lutnick, Donald Trump’s nominee for the key international trade post of US Commerce Secretary, is also the global chief executive of financial services firm Cantor Fitzgerald, which has a significant presence in Ireland with offices in Dublin, Cork and Limerick.
The commerce post has major implications for Ireland, as it handles the International Trade Administration, which sets tariffs on goods the US has determined are unfairly priced or subsidized, and the Bureau of Industry and Security, which imposes export controls to try to keep sensitive US technologies out of the reach of adversarial nations.
Cantor Fitzgerald has profited from ties to Ireland, being among the primary dealers in Irish government debt and is also one of the major arrangers of funds under the government's EIIS tax relief incentive scheme which allows individual investors to obtain income tax relief on investments in certain qualifying companies, such as West Cork Distillery and Great Northern Distillery, as well as windfarms and property development schemes.
Lutrick, if he needed, can obtain the inside track on Ireland’s subsidies, tax breaks and other inducements available to US corporations operating here, which may leave Irish interests exposed. However, as Cantor Fitzgerald does not have offices in any other EU country, the Irish government's access could be of significance to EU negotiators in dealing with the soon-to-be-confirmed head of the US Commerce.
Probably more critical to Lutnick’s handling of tariffs, will be Cantor Fitzgerald’s ties to China, which has a joint venture in Beijing with Chinese-state owned China Credit Trust.
These financial ties are likely to raise questions about whether Lutnick could be impartial or unduly influenced by Dublin or Beijing when making decisions about whether to impose fresh tariffs on EU or Chinese exports to the US.
However, Lutnik is a long-term friend of Donald Trump and was a major financial backer of Trump’s candidacy, donating and raising tens of millions of dollars during the election campaign and hence is unlikely to be troubled with any conflict-of-interest issues.
Regardless of his Cantor Fitzgerald business interests, Lutnik is unlikely to change his view on the imbalance of international trade with the US and has consistently advocated for tariffs to protect US manufacturers against foreign imports. His outspoken comments about the EU’s and China’s trade surplus over the US are well documented, with Ireland getting particularly damning references on the issue.
EU trade chief Valdis Dombrovskis told a news conference after a meeting of EU ministers responsible for trade last week, that the European Union should seek constructive engagement on trade with the incoming Trump administration, but be ready to hit back in a co-ordinated way at the United States if it imposes new tariffs on the 27-nation bloc.
He said there was broad agreement among EU ministers to maintain "constructive engagement" with the United States, not re-open old trade disputes, and avoid new ones.
Of particular worry for the EU is the return of the postponed tariffs on €6.4bn of EU steel and aluminium during Trump’s first term in office. The EU responded then with a weaker imposition of duties on €2.8bn of US goods, such as bourbon whiskey and Harley-Davidson motorcycles, hoping to ease the tension and prevent a further tariff escalation.
Fortunately, Joe Biden on being elected suspended the tariffs until the end of 2025. The Biden administration also agreed a truce until mid-2026 on tariffs linked to their two-decade conflict over aircraft subsidies.
For the present, it appears that the EU is hoping once again to cajole Trump on trade matters when he takes office on January 20, 2025, while readying for a more robust tariff retaliation if needs be.