Ireland’s economy stands on precarious ground as it prepares for the anticipated announcement of new tariffs by former President Donald Trump. The shortage of these chips has already created considerable negative impact. The country’s manufacturing climate would take a hit as well, as the country’s booming prescription drug sector—the country’s largest manufacturing base for such prolific U.S.
Indeed, Ireland is now the sixth largest source of foreign direct investment (FDI) into the United States. This tight relationship makes Ireland’s economy heavily dependent on American investments and enterprises. In 2023 so far, Irish companies have invested a jaw-dropping $351 billion (£272 billion) in the U.S., deepening this relationship. Ireland’s exceptionalism among European Union countries is likewise its heavy dependence on the U.S. as its primary export destination. This heavy reliance would put Ireland in a precarious position should tariffs be reinstated.
Ireland’s impressive population is around five million. Despite its size, it has grown into a bigger exporter than traditional economic powerhouses like Germany and Switzerland. The country’s export landscape is dominated by pharmaceuticals, which constitute a significant portion of Ireland’s total output. This sector alone made up 45% of all Irish goods exports, demonstrating its critical importance to the national economy.
Combilift is one such company boldly charting these new waters. This family-owned manufacturer, headquartered in County Monaghan, designs forklifts to thrive in extremely tight space constraints. These groundbreaking products allow companies that rely on warehouse operations to increase storage density in their warehouses. Combilift creates approximately 25% of its sales within the U.S. market and has 50 employees in the country.
The IDA has been at pains to point out the scale of Ireland’s dependency on foreign direct investment. This state government agency collaborates with more than 1,800 foreign direct investment (FDI) client firms. Among them are 766 U.S.-based firms that together employ more than 210,000 people in Ireland.
Since President Trump first floated the idea of these new tariffs, their potential impact has alarmed Irish officials. Pascal Donohoe, Minister for Finance, expressed alarm over the situation, stating, “It is very possible that between 50,000 and 80,000 jobs that would have been created or kept within the economy won’t be.” This prediction casts doubts on how stable the future Irish job market will be and how healthy its economy will be.
Taoiseach Micheál Martin described the looming tariffs as “a very grave and serious threat,” reflecting widespread anxiety regarding their potential consequences. Dan O’Brien, chief economist of the Institute of International and European Affairs, likened the situation to prior economic crises, noting that “then there was a financial crisis, it was immediate, it was like the wind blew the roof off the house.” He cautioned that tariffs are now undermining the very economic underpinnings of Ireland. This slow bleed would have profound consequences.
Former President Trump as much as admitted that Ireland’s plays the leading role in the modern worldwide pharmaceutical industry. He remarked, “All of a sudden Ireland has our pharmaceutical companies, this beautiful island of five million people has got the entire US pharmaceutical industry in its grasp.” His remarks highlight both Ireland’s strategic value and the vulnerability of its economic dependence on American capital.
To manufacturers such as Combilift, the tariffs are a double-edged sword. On the one hand, they need to stay in business while facing increasing economic unpredictability. At the same time, they do their best to offer a level of predictability to their own government customers. Martin McVicar, co-founder and managing director of Combilift, added that they are in the business of providing customer certainty. “We’ve given our customers certainty on what their costs will be in US dollars for products delivered to the port in the US,” he said. “At least they can try to plan their business around that at this stage.”
McVicar likewise sounded positive about his firm’s capability to innovateno matter the tariff’s damaging effects. “We’re enabling customers to expand without having to relocate and we’re adamant that should outweigh the impact of a tariff,” he stated. This decision is indicative of the widespread resolve of Irish companies to stand firm in the face of outside forces.