Trump blinks, but what does it mean?

Good morning,

Well, he blinked.

In the end, crushing pressure on US treasury bonds drove Donald Trump to introduce a 90 day pause on plans to introduce tariffs on trading partners - including the EU, and therefore Ireland. The tariffs on these goods will now stand at 10 per cent, his chosen “baseline”, rather than the 20 per cent previously advertised.

Notwithstanding Trump’s rapidly escalating tariff war against China, which will of course have consequences for Europe and the rest of the world, this was a reprieve.

As Trump has shown, the assumption that a good businessperson will automatically be a good politician is flawed

Government planning reforms to tackle regulatory barriers

Long Covid sick pay scheme for healthcare staff to be wound down

While markets surged, Tánaiste Simon Harris, who was in Washington DC for a meeting with US Secretary of Commerce Howard Lutnick, said it would offer more space for negotiation. Given the fact that hours previously the global economy was staring down a gun barrel, this was welcome news.

That being said - if you were a policymaker, a trading partner, a political leader in any country in the world, what useful signal could you take from Trump’s reversal?

The conventional wisdom on the eve of his second term was that the markets would be a control on his actions. The first few weeks seemed to repudiate this theory, until last night. Faced with what looked a bit like an Armageddon in the markets which would bleed into the real economy, Trump changed course.

Does this mean the conventional wisdom was correct, and that markets will act as a corrective on his sweeping political and trade agenda? That this will lead his administration to a more orthodox path?

Or was it baldly advertising a deeper volatility at the heart of the US administration - the White House effectively unmoored from anything approaching a coherent plan?

At this juncture, it looks more like the latter. While the fever has temporarily broken, the upheaval of the last few days seems to be a lasting feature of the US political system - and therefore the world economy. Navigating this will be one of - if not the - key challenges facing the government here.

Pat Leahy and Keith Duggan capture the ongoing uncertainty in our lead story today.

Meanwhile, Cliff Taylor clarifies what it all means.

Short term pain

On the home front, draft laws on short term lettings were due to go to Cabinet on Tuesday, with a stipulation effectively prohibiting new lettings in towns of more than 10,000 people.

However, the plans stalled at the last minute after a crossing of swords between Minister for Housing James Browne and Minister for Tourism Peter Burke. One side privately pointed the finger at Burke for bringing a memo to Cabinet that was missing elements and would have required remediation, while the other pushed back, saying Burke had sought to engage with Browne in the weeks leading up to the move. It’s all a bit he-said-she-said, but the net effect is that the Government took no decision on the matter this week.

The Irish Daily Mail then reported concerns about the impact of the measure on tourism among ministers, namely Norma Foley and Michael Healy-Rae.

The Cabinet memo also outlines concerns being flagged by Jack Chamber’s Department of Public Expenditure and Reform about the measures.

The reforms have been agreed by Coalition leaders and the Cabinet’s housing subcommittee. Given this is the case, it’s hard to see how they won’t go through Cabinet - with senior sources insisting that will happen next week. However, with an entire legislative process still to happen, keep an eye out for some nuance watering this measure down.

In the midst of a housing crisis, after stalled attempts in the last government to introduce tighter legislation forcing homes out of short term and into long term rental, patience for internal government jousting and further delays will be thin on the ground.

Best reads

Miriam Lord on the surprising and partial return of Eoin Hayes to the SocDem ranks while the party scraps for Oireachtas committee rights.

Cormac McQuinn reports on the mechanics of this behind-the-scenes move by the SocDems here.

From the foreign desk, Jack Power writes on the Mercosur deal.

And this morning, Newton Emerson looks at the dilemma facing the British Government.

Playbook

Action in the Dáil starts with Oral Parliamentary Questions for Darragh O’Brien, followed by week’s last Leaders’ Questions, Other Members’ Questions and Questions on Policy Legislation before lunch.

In the afternoon, there will be statements on Uisce Éireann and Topical Issues before the house adjourns for the Easter break.

The full schedule is here.

The Seanad sits for Commencement Matters at 9.30am, and will take the final stages of the legislation relating to the office of the Financial Services and Pensions Ombudsman in the afternoon, before adjourning at lunchtime.

Here’s the full schedule.

The Cabinet subcommittee on migration is set to meet today, while Taoiseach Micheál Martin will delier a keynote address at the shared island forum in Dublin Castle.

Ministers on the move: Paschal Donohoe is at Eurogroup and Ecofin in Warsaw, while Minister for Agriculture Martin Heydon continues his US charm offensive in Kentucky.

Minister of State Neale Richmond is in Liberia, while his junior ministerial colleagues Timmy Dooley and Niamh Smyth are at a wind energy conference in Copenhagan and a diplomatic event in Dubai, respectively.

Sign up for Politics push alerts and have the best news, analysis and comment delivered directly to your phone

Was this email forwarded to you? Sign up for the Inside Politics newsletter to get our politics team’s take direct to your inbox.