DONALD TRUMP has declared Wednesday “Liberation Day” when he will unleash his latest tariffs — the taxes he plans to impose on the imports of goods.
The US President will impose a 25 per cent levy on Irish-based US pharmaceutical companies in a bid to lure them back to the States, potentially costing up to 80,000 jobs in Ireland.
He said: “They have taken so much out of our country, friend and foe, and frankly friend has been often times much worse than foe.”
Announcing his plan, Trump said the US did not make many medicines, adding: “It’s in other countries — largely made in China, a lot of it made in Ireland.
“Ireland was very smart. We love Ireland. But we are going to have that.”
April 2 is being viewed with dread in Government Buildings and in office boardrooms across the State.
It could mark the beginning of a full-scale trade war between the European Union and the US.
Chief economist with the Institute of International and European Affairs, Dan O’Brien, warned: “Potentially it’s a date that will go down in Irish economic history — it’s that serious.”
Here, we take a closer look . . .
WHY SHOULD IRELAND BE WORRIED ABOUT TARIFFS?
IRELAND’S long-standing economic model has been based on foreign direct investment.
A lot of our economic growth and expansion has come from a period of globalisation and economic policy of free trade around the world.
The Government has warned that up to 80,000 jobs that could be created in future may not proceed in Ireland’s multinational sector if President Trump launches a trade war with the EU.
It is expected that Trump will target these roles as part of an effort to repatriate jobs and taxes to the US.
Chief economist with Deloitte Ireland, Kate English, says Ireland has an exposure to exports of medical and pharmaceutical products.
She explained: “Medical and pharma products exported to the US accounted for 20 per cent of total good exports in Ireland in 2024.
“And they accounted for about 61 per cent of total goods exported to the US.”
She added: “Any change in that trade environment changes the dynamic of how our exports could potentially perform and that could have a knock-on impact to our wider economic growth story.”
The EU is expected to respond with tariffs against the US.
It’s concerned that any tariff on an Irish product will make it more expensive in the US, potentially making it less competitive there.
HOW MUCH DOES IRELAND EXPORT TO THE US?
The US is Ireland’s largest export market, with a significant portion of exports consisting of medical and pharmaceutical products.
The Central Statistics Office’s estimates for 2024 show that total Irish exports were valued at a record €223.8billion, and imports were valued at €133.6billion.
Exports of goods to the US were €72.6billion in 2024, up €18.6billion on 2023, while imports of goods from the US were €22.5billion, a decrease of two per cent on 2023.
Pharmaceutical goods made up €58billion of exports to the US last year.
CSO figures for 2023 show that the US accounted for 28 per cent of the total value of Irish exports at €54billion.
Mr Trump said the tariffs on pharmaceuticals are aimed at bringing the industry back to the US.
WHAT IMPACT COULD THEY HAVE ON IRISH EXPORTS?
Tariffs could have both a direct and an indirect impact on Irish exports.
The direct impact is that Irish goods will become more expensive in the US and people with smaller budgets might not continue to buy them and choose a cheaper option instead.
The indirect impact is on Irish companies who sit in the supply chain of goods that are finished elsewhere.
For example, if a tariff is put on intermediary goods produced in Ireland as part of a product that is finished in another country, it will make the Irish component more expensive and less attractive.
ESRI Research Professor Kieran McQuinn said there is “no doubt” that US tariffs would have a negative impact on jobs and investment.
WHAT ARE THE POTENTIAL KNOCK-ON EFFECTS FOR THE WIDER IRISH ECONOMY?
The ESRI and Department of Finance have estimated that tariffs could cost Ireland more than €18billion in lost trade and pose a long-term risk to the public finances.
The sectors that are most exposed include pharmaceutical and technology manufacturing where we often see higher wages among employees in these areas.
A secondary impact of these sectors being affected includes a possible reduction in employment levels or activity.
Ms English said: “There could be an impact to our VAT receipts that comes from the consumer spending that takes place.
“And if there’s a reduction in your employment within those sectors, there’s also the potential impact on income tax receipts.
“It’s the immediate sectors that are most exposed to it, but it’s also then those secondary impacts that can be potentially felt within our economy.”
HOW ARE AFFECTED SECTORS REACTING?
The Irish Exporters Association said the uncertainty and chaos surrounding Trump’s plan is not helpful to anybody and people are worried about the effect it will have on their business and their livelihood.
It’s concerned that if exports slow and Irish companies sell less and the economy slows down, there will be a massive impact in the long-term in Ireland.
CEO Simon McKeever said there’s a lot of attention focused on the foreign direct investment community here.
But he pointed out that many Irish-owned businesses are exporting to the US and have strategic plans that see them growing there.
He said: “I have no doubt Ireland will be hit with tariffs as part of the tariffs levelled against the European Union.
“Beyond trade, the impact on foreign direct investment cannot be overstated.”
The Trump administration tariffs pose a major threat to Irish food and drink exports.
Last year, we exported approximately €1.9 billion worth of food and drink products to the US.
President of the Irish Farmers Association Francie Gorman said the US market accounts for around 11 per cent of total food and drink exports.
He said: “The scale of the tariffs being talked about would have a serious impact on what we have achieved.”
