Dublin, Ireland – Ireland is set to be one of the hardest-hit nations as former US President Donald Trump prepares to impose new tariffs on European Union (EU) goods later this week.
The US tariffs, expected to be around 20%, could significantly impact Irish exports, given the country’s heavy reliance on the US market. In 2024, Ireland exported €73 billion (£61 billion) worth of goods to the US, nearly one-third of its total exports.
Irish Economy at Risk
The Taoiseach (Irish Prime Minister), Micheál Martin, described the looming tariffs as “a grave and serious threat.”
A joint analysis by Ireland’s Department of Finance and the Economic and Social Research Institute (ESRI) estimates that the tariffs could cost the country over €18 billion (£15bn) in lost trade. Experts also warn that an extended trade war between the US and the EU could destabilize Ireland’s public finances.
Impact on Irish Businesses
Ireland’s deep economic ties with the US mean the tariffs could have far-reaching effects across communities and industries.
One of the many Irish companies bracing for impact is Combilift, a Monaghan-based forklift manufacturer, which generates 25% of its sales in the US market.
Company co-founder Martin McVicar has assured US clients that he will freeze product prices for now to provide stability amid uncertainty.
“We’ve given our customers certainty on their costs in US dollars,” he said. Despite the challenges, McVicar remains optimistic about the demand for Combilift’s space-saving warehouse forklifts, which will help US businesses increase storage without relocating.
Pharmaceutical Industry Under Scrutiny
The pharmaceutical sector, Ireland’s largest export industry, is particularly vulnerable to Trump’s trade policies. In 2024, pharmaceutical exports rose by €22.4bn (£18.8bn), reaching nearly €100bn (£83.7bn), or 45% of total exports.
US pharmaceutical giants like Pfizer and Eli Lilly operate large manufacturing hubs in Ireland. However, Trump has frequently criticized the outsourcing of US pharma production to Ireland, hinting at possible future industry-specific tariffs.
Experts Warn of Economic Fallout
Dan O’Brien, Chief Economist at the Institute of International and European Affairs, emphasized the scale of the challenge.
“Ireland is the single biggest exporter of pharmaceuticals to the United States, surpassing even Germany and Switzerland,” he noted.
O’Brien warned that while the tariffs’ impact may not be as immediate as the 2008 financial crisis, they could gradually weaken Ireland’s economic foundations.
The Irish government has issued dire warnings about potential job losses. Paschal Donohoe, Minister for Finance and President of the Eurogroup of Finance Ministers, has projected that between 50,000 and 80,000 jobs could be at risk.
Diplomatic Efforts and Global Trade Relations
The Irish government has ramped up diplomatic efforts, with Taoiseach Micheál Martin and Tánaiste Simon Harris engaging in transatlantic discussions to mitigate the impact of the tariffs.
Ireland’s Industrial Development Authority (IDA) highlights the deep economic ties between Ireland and the US:
- 766 US companies operate in Ireland, employing over 210,000 people and indirectly supporting 166,000 more jobs.
- Irish companies have invested $351bn (£272bn) in the US, employing over 200,000 people across all 50 states.
What’s Next?
As the world awaits Trump’s official tariff announcement, Ireland faces a crucial moment in its economic relationship with the US. While Irish businesses and policymakers brace for impact, the potential for a wider EU-US trade conflict looms large, with long-term consequences for global trade and investment.
