Having seen off one severe economic threat from Brexit, Irish government officials could be excused for feeling a sense of dread should Donald Trump win the White House in the US election.
Ireland got caught up in the transatlantic trade wars when President Trump duelled with the EU during his first term, in some very odd ways: Irish dairy products to the US worth €250 million, including top-selling Kerrygold, along with some whiskeys became ensnared in a global tit-for-tat round of retaliation, as the US took aim at the EU over alleged financial aid to plane maker Airbus. Trump presidency 2.0 potentially threatens much worse, analysts warn.
The Economist magazine has long warned about Trump’s plans.
“In contrast to the slapdash insurgency that captured the White House in 2016, the veterans of Mr Trump’s first administration are working hard to ensure that Trump Two would be disciplined and focused on getting things done,” the magazine said in a cover story last year.
“Even at this early stage, the details are something to behold,” it reported.
Much more recently on the campaign trail, Trump has threatened to impose tariffs on all goods coming into the US of up to 20% and to slash the US corporation tax to 15%. As a leading exporter into the US, the Irish economy is more exposed than most should a nativist administration follow through on turbo-charged America First election pledges.
Prosperity in the Republic is anchored to the huge number of people employed by US large companies that provide high level pharma manufacturing, like Pfizer, or host major tech services like Apple. The tech giant employs 6,000 people in Cork who help run large parts of the global operations of the Californian giant, even though not a single iPhone or iPad is made on the island.
US firms like the Alphabet-owned Google, Microsoft, and Meta which owns Facebook and Instagram, as well as Chinese firm TikTok, all have significant global facilities dotted around the Dublin region. They help contribute to the 118,000 people employed across all tech firms involved in the so-called information and communications sector in the Republic, official figures suggest.
And a further 111,000 people are directly employed in the so-called industry sector, which covers the manufacturing activities of the US multinationals and a whole different bunch of major employers. They include the 4,000 jobs at chipmaker Intel in Leixlip in Co Kildare, and the 5,000 jobs that Pfizer has across its three Irish facilities, at Grange Castle in West Dublin, Ringaskiddy in Cork, and at Newbridge in Kildare.
A Central Bank report last year also highlighted the outsized role the US tech firms were playing, not just in terms of the jobs they provide and the wages they pay but also the billions of euros in corporation tax revenues they contribute to the Irish exchequer. The tech giants last year accounted for an average of €1,535 in weekly earnings - way above the average pay for the economy as a whole - and also helped contribute to an enormous haul of €24 billion in corporation tax revenues the government took in last year.
Another remarkable statistic explains why the Republic could find itself in the eye of a Trump storm. The total value of goods exported from the Republic to the US amounted last year to €63 billion, the second highest destination after the EU. By way of comparison, the Republic exported goods to Britain worth €17 billion. All this matters a great deal to the north as well, because prosperity sweeps across the whole island in any number of interesting ways.
Anthony Foley, emeritus associate professor at DCU, tells the Irish News that if a victorious Trump were to do what he says he will do, the US will frown on investments pouring overseas to the likes of Ireland.
And a 20% tariff on US imports and a cut to 15% in the US corporation tax rate “would potentially be very damaging” to Ireland, senior economist Jim Power says.
Senior economist Austin Hughes adds that uncertainty about Trump’s agenda will likely lower global growth, and thereby directly affect exports-rich Ireland. Still, he cautions that the multinational sector is anchored in Ireland.
A Trump presidency “doesn’t mean they pack up their tents and leave the Irish economy”, he says. Fergal O’Brien, director at Ibec, the Republic’s largest business group, says concerns should be tempered because the US will continue to be a significant export market for the Republic. Ibec does not expect any “dramatic change” in trade relations with the US after the election, he tells the Irish News.
- Eamon Quinn is at eamon.quinnbiz@gmail.com
