Trump’s Trade Policies Pose Major Risk to Irish Economy

As US President-elect Donald Trump assumes office in 2025, his proposed trade and tax policies could significantly disrupt Ireland’s economy, which heavily depends on foreign direct investment (FDI) from US companies. Experts warn that potential tariffs and tax cuts may pose one of the largest risks to Ireland’s economic stability in the near term. These concerns revolve around the impact of Trump’s trade policies.

Impact of US Tariffs on Irish Exports and Economy

Trump’s plan to impose tariffs of 10-20% on imports could severely affect Ireland’s exports to the US, valued at €54bn in 2023. Higher costs for US consumers would likely make Irish goods less competitive in the US market. Given the significant role US companies play in Ireland’s GDP, the risk is substantial. Over 970 US companies, especially in IT, chemicals, and financial services, operate in Ireland, contributing to its economic growth. This impact is directly related to Trump’s trade policies.

Threat to Ireland’s Competitive Tax Advantage

In addition to tariffs, Trump’s proposed tax cuts for US companies could erode Ireland’s competitive advantage. With the US corporation tax rate potentially dropping to 15%, it may prompt US companies to repatriate jobs and operations, leading to a reduction in FDI. Ireland’s favorable tax rates, which range from 12.5% to 15%, have attracted major tech giants like Apple, Microsoft, and Google, but these companies may now reconsider their operations. These tax policies, proposed under Trump, are a major concern for Ireland.

Trade War Risks and Economic Uncertainty

Trump’s proposed tariffs on European goods, including cars, could trigger retaliatory measures from the European Union. Although US companies are not expected to leave Ireland immediately, the unpredictability of the trade environment could create economic uncertainty for Irish businesses. The possibility of a trade war may lead to disruptions in supply chains, affecting jobs and tax revenues. This uncertainty is fueled by Trump’s trade policies.

Conclusion

Ireland’s economy remains vulnerable to the shifting global trade landscape under Trump’s policies. The proposed tariffs and tax changes could significantly damage Ireland’s export market and reduce its attractiveness as a base for US companies. Irish businesses must navigate these uncertain times as the country braces for the impact of potential trade disruptions. Much of this uncertainty relates to Trump’s trade policies.