Ireland Anticipated to Be One of the Most Affected Countries

Ireland is set to be one of the countries most impacted when President Trump unveils a new set of tariffs later this week.

Goods from the EU are anticipated to incur a tariff of around 20% upon entering the United States.

Of all EU nations, Ireland relies most heavily on the US as a market for its exports.

In 2024, the value of Irish goods exported to the US was €73bn (£61bn), which is nearly a third of the nation’s total exports.

Tariffs are essentially taxes imposed on goods brought in from abroad.

Nations impose tariffs to protect their local producers from foreign competition.

The Taoiseach (Irish Prime Minister) Micheál Martin remarked on Monday that the increase in US tariffs represents “a very serious and grave concern.”

According to a report co-authored by Ireland’s Department of Finance and the ESRI think tank, the tariffs could cost Ireland over €18bn (£15bn) in lost trade.

It also cautioned that a drawn-out trade conflict between the EU and the US could jeopardize Ireland’s fiscal stability.

As the announcement of tariffs approaches, the concern in Ireland is evident from the public’s interest in the topic.

Numerous Irish towns and cities have benefited from the presence of US companies for many years, and employees travel to these businesses from all corners of Ireland, indicating the widespread impact tariffs could have throughout the nation.

The Monaghan-based manufacturer Combilift generates roughly 25% of its sales from the US market, where it also employs 50 individuals.

Co-founder and managing director Martin McVicar traveled to Chicago in March to brief his clients in the US.

He informed them that this year, he will keep the dollar prices for all Combilift products at the same level to provide some certainty regarding import expenses.

“We’ve ensured our customers know the costs in US dollars for products delivered to the port in the US.

“This way, they can plan their business operations accordingly at this time.”

Mr. McVicar is optimistic about the US market, believing that his products help clients run their businesses more efficiently.

Combilift manufactures forklifts engineered to function in snug areas, allowing enterprises to optimize their storage in warehouses.

“We enable our customers to grow without the need for relocation, and we are confident that this benefit will surpass any adverse effect of a tariff,” he stated.

Ireland’s most significant export sector is pharmaceuticals; the nation is a key manufacturing hub for US giants like Pfizer and Eli Lilly.

In 2024, total exports of medical and pharmaceutical products surged by €22.4bn (£18.8bn) or 29%, approaching €100bn (£83.7bn).

These goods constituted 45% of all Irish goods exports.

Trump has repeatedly voiced his dissatisfaction over the magnitude of US pharmaceutical manufacturing in Ireland.

Recently, he remarked: “All of a sudden, Ireland has our pharmaceutical companies; this beautiful island of five million people has the entire US pharmaceutical industry at its command.”

Trump has also considered implementing targeted tariffs on pharmaceuticals, akin to those for car imports.

However, this is not anticipated in the current round of tariffs.

Analysis: John Campbell, BBC News NI Economics and Business Editor

Ireland has benefitted significantly from globalization—an ongoing process that facilitates the movement of people, goods, and money globally.

Adjustments to global tax regulations over the past decade have been particularly advantageous.

This has resulted in major international pharmaceutical and tech firms paying a substantial portion of their taxes in Ireland.

The influx of capital has enabled the government to establish a national wealth fund.

Donald Trump’s deglobalization tendencies pose a clear threat to this prosperity.

Dan O’Brien, chief economist at the Institute of International and European Affairs, argues that the Irish economy may be vulnerable due to the success of its pharmaceutical industry.

“The Republic is the foremost exporter of pharmaceuticals to the United States. With a population surpassing five million, this positions it ahead of even traditional leaders like Germany and Switzerland,” he stated.

Mr. O’Brien warned that the ramifications of the tariffs on Ireland could echo the country’s economic collapse in 2008.

“During that time, we faced a financial collapse that was immediate, akin to a roof blown off by a strong wind,” he noted.

“In comparison, this situation is more like a gradual undermining of the foundation, which is critically important for stability.”

If the populace remains uncertain about the implications of these adjustments, the Irish government has been unequivocal in recent weeks.

In a stark assessment, Finance Minister Pascal Donohoe, known for his cautious approach to economic commentary, highlighted the potential repercussions for Ireland in a worst-case scenario.

The minister, who is also the president of the Eurogroup of Finance Ministers, stated, “It is quite possible that between 50,000 and 80,000 jobs that would have been created or preserved in the economy may not come to fruition.”

This serious evaluation has been accompanied by diplomatic efforts between transatlantic and EU discussions involving Taoiseach Micheál Martin and Tánaiste (Deputy PM) Simon Harris.

The extent of Ireland’s dependence on foreign direct investment from the US has been emphasized by the Industrial Development Authority (IDA) in Ireland.

An IDA representative informed BBC News NI: “IDA Ireland collaborates with over 1,800 FDI client companies, of which 766 are US enterprises that directly employ more than 210,000 individuals and indirectly support an additional 166,000 jobs.

“Conversely, Ireland ranks as the sixth largest source of foreign direct investment in the US, with Irish companies investing $351bn (£272bn) in 2023.

“Over 200,000 jobs are supported by 770 Irish companies operating across all 50 states.”