By Irishexaminer.com,John Whelan

Copyright irishexaminer

Six months after US president Donald Trump announced his ultra-high tariffs, the global trading system is holding up well.

According to the United Nations Trade and Development, world trade has increased by about €270bn in the first half of 2025.

Much of the growth has been driven by exports. EU exports to the US have remained strong, reaching $395bn (€336.3bn) in the seven months to July, an increase of $49bn (€41.9bn) on the same period in 2024. Stronger exports to the UK, Switzerland, and Turkey also boosted the figures.

Irish exports exceeded the Eurozone average, growing by just under 5% in the seven months to July.

The Trump tariff threats have yet to have any real impact, with goods exports to the US up by €42bn (€35.9bn) over the same period last year.

The surge in exports to the US in the early part of the year, as companies scrambled to get ahead of the anticipated tariffs, should by now have been offset, but there is little sign of that so far.

US trade deficit with EU widens

More difficult to understand and a conundrum for Donald Trump is the widening of the US trade deficit with the EU, particularly Ireland, but also with most of the rest of the world, in the first half of the year.

Trump has always held that tariffs are the key to improving the US’ trade balance, which is why his “reciprocal” tariffs are purported to reflect the size of America’s deficit with each economy.

Economists dispute these claims, warning tariffs will reduce America’s overall trade volume, both exports and imports. And, so far, their admonitions have been borne out.

However, the European purchasing managers’ survey comes amid increasingly mixed signals about Europe’s economic outlook.

Easing interest rates and the EU’s pledge to ramp up spending on infrastructure and defence have only partially offset the damage inflicted on EU exporters by US tariffs and a weakening dollar.

There are strong indicators which suggest September’s uptick in activity is masking the eurozone’s underlying weakness.

The European Central Bank, despite hiking its growth forecast for the eurozone for this year, warned there is “considerable uncertainty” surrounding EU firms’ ability to adapt to an increasingly protectionist global trade environment.

The OECD also cautioned in issuing its September report that while global growth proved more resilient than expected in the first half of 2025, the full impact of US tariff increases is still unfolding, with early signs of effects on consumer behaviour, labour markets, and prices.

EU needs more trade deals outside US

There seems to be a consensus that the EU needs to seek and finalise more trade deals outside the US to protect its economic interests.

Deals with countries like Indonesia, Mexico, and Canada, and blocs such as Mercosur, would create new opportunities for EU exports, reduce reliance on specific markets, and counterbalance US actions.

But some EU countries are blocking the adoption of these free trade deals that have been negotiated, with Ireland being a particular offender.

The failure to adopt the EU-Canada agreement is a typical example, but the Mercosur agreement is another, and so are the Indonesia and Mexico agreements.

Taoiseach Micheál Martin, while meeting with Canadian prime minister Mark Carney during their Ottawa meeting last week, was questioned on the eight-year delay in Ireland ratifying the EU free trade agreement with Canada. Next year was his commitment.

The ESRI in their Autumn Quarterly report, have offered some robust recommendations to the Government in tackling the looming threats to our international trade, stating “in the case of the Mercosur deal, we would urge the Government to reflect carefully on its reservations”.

The ESRI are clear that the estimated outcomes that have been provided to the Government show net positive outcomes for Ireland, and they go on to say that at a time when economic policy should be directed towards protecting and enhancing free trade, it seems counterproductive to be opposing free trade agreements.