By Business & Finance 
Donald Trump has won the U.S. presidency for the second time in eight years. His proposed economic plans could threaten Ireland’s economy with a trade war, lowered taxes and geopolitical instability in Europe.
By Liana Handler, Editorial Assistant
This article was originally published in Business & Finance magazine vol. 60, annual review 2024. To read the latest issue, click here.
Early Nov. 6, Ireland woke to the news that Donald Trump reclaimed the presidency after a campaign that included two assassination attempts, 34 felony convictions of falsifying business records and another 54 indictments ranging from mishandling classified documents to attempting to overturn the 2020 election.
Though the days ahead will be marked with uncertainty, the past policies of the Trump Administration and the promises he made during this campaign cycle directly impact Ireland, especially with the risk of higher tariffs, more corporate-friendly U.S. domestic policies and less international support from one of Europe’s most powerful allies.
Tariffs and Global Trade
The United States is one of Ireland’s biggest importers. Over 30% of Irish goods are exported to the North American country, which makes Ireland particularly vulnerable to any trade disputes.
During the 2024 elections, Trump floated a universal tariff of all internationally produced goods. The amount varied, but it was approximately between 10% to 20%. No matter the level, this high tariff on all countries outside of the United States would slow global trade and reduce the profits of Irish companies.
The other concern for Ireland is another global trade war. U.S. pressures to cut ties with Beijing increased under the Trump and Biden Administrations. Still, it was Trump who engaged in a trade war with China, resulting in tariffs on $34 billion in Chinese imports.
Similar to 2018, Europe and other U.S. allies could potentially get swept up in the disputes. Steel, under a Trump presidency, faced a 25% tariff. This primarily impacted the E.U. and Canada with their U.S. steel imports worth about $8 billion and $12 billion, respectively.
Ireland’s relationship with Chinese telecom Huawei seems to put the country in a tough position. In 2020, U.S. officials repeated warnings against using the company within Ireland after America banned the company in 2019.
Yet, the Chinese company contributes €800 million in economic impact, according to the May 2024 report published by Amárach. Additionally, the report states that Huawei will contribute an estimated economic value of €4.5 billion to Ireland by 2030.
Ireland risks relations with both China and the United States if they are put in a position to choose between a Chinese company and U.S. foreign policy.
Irish businesses that focus on green energy can benefit from a Trump presidency, though. Mainstream Renewable Energy, headquartered in Dublin, produces more than 16GW of energy throughout Latin America, Africa and Asia with plans to add another 25GW in the next decade, according to IDA Ireland.
The American president-elect has consistently spoken against renewable energy, stating that the U.S. should be removed from the Paris Agreement and remove regulation on oil and gas drilling. Should the North American country reduce renewable energy incentives for domestic companies, Irish and other European businesses have the ability to grow without American competition.
Taxes
Another threat to Ireland’s economy is the proposed corporate tax rate that Trump might introduce in his time in office. Ireland has an established history of drawing U.S. businesses to the country by providing low taxes. Currently, the Irish corporate tax rate is 15%.
However, President Trump stated that he wanted to reduce the current rate of 21% to match Ireland’s. His stated goal is to incentivize businesses to return to the country. If this policy is pushed through, it could directly impact the level of U.S. foreign direct investment. Last year, American investments in Ireland totalled more than €450 billion. This economic impact could lessen significantly if Americans chose to invest in more local corporations.
Companies that already operate out of Ireland like Google likely wouldn’t move. Ireland, as the only native-English-speaking country in the E.U., still remains an attractive choice.
Trump on International Policies
International politics are equally as important as economic policies, especially as the European Union stands between Russia and the United States. A stable, peaceful world is better financially for global trade than one marked by violence.
The war in Ukraine rages on two years after Putin first ordered a land, sea and air invasion of their neighbours. By this March, about 104,000 Ukrainians fled to Ireland since the war began. Then in December of 2023, the Irish Government approved a weekly €38.80 allowance per adult for Ukrainians seeking safety among other available social policies.
The United States, despite heated debates in the country, has continued to support Ukraine with $175 billion in investments to help refugees, independent journalists and the European country’s military. The Trump administration risks this relationship.
Trump has historically threatened to leave NATO due to his perceived concerns about a lack of defence spending in European allies. In February, he furthered European fears when he said that Russia could do whatever Putin wanted to “delinquent” NATO members who “didn’t pay.”
In other words, Ireland and other European countries should prepare to shoulder more responsibility on the international stage if the U.S. becomes more isolationist.
The Power of a Trump Administration
Due to the division of power in the U.S., Congress decides most large financial decisions in the U.S. Currently, votes are still being counted for the elections in the House of Representatives. However, if the Republicans gain a majority of the seats in the House, they would control both the legislative and executive branches. In other words, a version of the plans pushed by the Trump Administration would likely become law.
The next Trump presidency brings an unpredictable approach to international politics and global trading. Yet, Ireland has a special opportunity. When troubled times approach, strong leaders stand firm in morals and values. Ireland and its businesses can be that leader.
This article was originally published in Business & Finance magazine vol. 60, annual review 2024. To read the latest issue, click here.
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