Ireland's Booming Exports to the US: A 34% Surge Amid Political Tensions

In 2024, Ireland experienced a remarkable 34% rise in goods exports to the United States, reaching €72.6 billion (£60.4 billion), while imports from the US slightly dipped to €22.5 billion (£18.7 billion). This shift has resulted in a significant goods-trade surplus of over €50 billion (£41.6 billion) for Ireland against the US, as reported by the Central Statistics Office (CSO).

The booming trade relationship has become increasingly relevant in the political climate, especially following Donald Trump’s return to the presidency. Trump has criticized countries with large trade surpluses, viewing them as benefiting at the expense of the US. Recently, he unveiled a “fair and reciprocal” trade plan, hinting at potential tariffs on imports from various nations, including those within the EU. Despite this, he has not specifically targeted Ireland.

Trade policy within the EU is notably an “exclusive competence,” meaning that only the EU can negotiate trade agreements and impose tariffs, not individual member states. A crucial driver of Ireland’s trade surplus with the US is its robust pharmaceutical sector; pharmaceuticals alone accounted for about 45% of all Irish exports, with the sector’s exports increasing by 29% to almost €100 billion (£83.1 billion) in 2024.

The surge in exports is also linked to specific products like Eli Lilly’s weight loss drug, Zepbound, produced in County Cork. The US pharmaceutical industry is drawn to Ireland due to its favorable corporate tax rates. Economic researcher Brad Setser, associated with the US Council on Foreign Relations, has highlighted tax avoidance as a key reason for the scale of US pharmaceutical imports from Ireland and other countries like Belgium and Switzerland.

In summary, Ireland’s escalating goods exports to the US underscore a strengthening economic relationship that remains intertwined with the evolving political narrative around trade policies and practices.