Tariff Turmoil: How Trump's Policies Could Devastate Ireland's Economy

As President Trump prepares to unveil new tariffs this week, Ireland is bracing for a significant economic hit. With EU goods facing an average 20% tariff upon entry to the United States, Ireland, which relies heavily on the US as its primary export market, stands to lose immensely. In 2024, Irish exports to the US totaled €73bn (£61bn), representing nearly a third of the country’s overall exports, underscoring the vulnerability of the Irish economy to trade disruptions.

Irish Taoiseach Micheál Martin has articulated the potential fallout, describing the tariffs as “a very grave and serious threat” to the nation. A collaborative analysis from the Department of Finance and the ESRI think tank projected that these tariffs could cost Ireland upwards of €18bn (£15bn) in lost trade, exacerbating concerns around a prolonged EU-US trade war that risks further strains on public finances.

The effects of the coming tariffs are not just theoretical; they could reach into numerous communities across Ireland, a country that has long benefited from US business operations. For instance, Combilift, a manufacturer based in Monaghan, reveals how current uprise in tariffs could impact operations, as they derive 25% of sales from the US market. The company’s strategy includes freezing dollar prices to provide clients with some predictability amidst economic uncertainty.

The pharmaceutical sector is Ireland’s largest export industry, linked closely with US giants like Pfizer and Eli Lilly. With 45% of Irish exports tied to medical and pharma products, any adverse tariff implications could resonate deeply. Despite Trump’s critical remarks regarding US pharmaceutical investments in Ireland, tariffs specifically targeting this sector are not anticipated in this round.

Economist Dan O’Brien warns that the current crisis resembles an incremental erosion of economic stability, contrasting with the immediate shocks felt during the 2008 financial crisis. He notes that Ireland’s unparalleled position as a major Pharma exporter to the US—outdoing traditional heavyweights like Germany and Switzerland—could amplify the fallout.

Cautious government communications predict dire outcomes, with estimates suggesting that between 50,000 and 80,000 jobs might not be created or maintained as a result of these tariffs. Such caution is echoed by the Industrial Development Authority, which highlights the reliance of over 210,000 employees in Ireland on US firms and emphasizes that Irish investment in the US is a major economic driver.

As anticipation builds ahead of Trump’s announcement, the precarious situation reveals Ireland’s intricate interdependence with US economic policies, and the profound potential impacts of tariff implementations loom large over the Emerald Isle.