As Donald Trump returns to the White House, a phalanx of Irish politicians, diplomatic corps and representatives of the State’s enterprise agencies are on high alert. With his decisive mandate, control of both houses and disruptive rhetoric, there is a real sense of anxiety on these shores.
But this isn’t our first time around this particular block. Trump’s first term as president sparked similar concerns about Ireland’s economic and diplomatic ties with the US. Those fears proved overblown. The US-Ireland relationship has also weathered plenty of recent storms, from the global financial crisis to Brexit and a pandemic.
While serving as chief executive of IDA Ireland during Trump’s first presidency, there was a similar degree of apprehension that ultimately shifted to a strategic focus that safeguarded our interests. Our most pessimistic predictions did not come to pass. American firms see Ireland as a stable, competitive and innovative partner. That resilience isn’t accidental. It stems from Ireland’s deliberate cultivation of a robust business ecosystem over decades.
We have to accept that president Trump will do what he believes is in the interest of the United States, which is precisely what he was elected to do. Irish and US interests might not always align. The key is to avoid paralysis by anxiety. Focus on what we can control rather than speculating ourselves into a crisis.
When dealing with Trump, Ireland needs to focus on what we can control rather than speculating ourselves into a crisis
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The context for president Trump’s second term is vastly different from his first. He returns a full term wiser with a more significant mandate amid a fractured geopolitical landscape, which has resulted in a more uncertain economic environment.
Ireland is exposed to the ripple effects of these challenges. Trump’s economic nationalism could exacerbate global trade tensions, disrupt Foreign Direct Investment (FDI) flows, or even target EU and Ireland’s key export sectors.
Another big difference from 2017 is that we no longer have the excuse of being caught by surprise. While Trump’s 2016 election shocked global politics, his 2024 win was predictable. Traditionally, Ireland may have had stronger ties to the Democratic establishment, but relationships with both Republicans and, indeed, Trump allies are crucial.
His electoral success – winning both the popular vote and control of Congress – gives him significant authority to act decisively. Ireland has had ample warning to prepare. The question is: have we done enough?
President Trump’s recipe for driving economic growth revolves around an economic nationalism with three main instruments: trade policy, tax policy and a continuation of Biden-era subsidies.
[ IDA chief plays down threat to Ireland from Trump’s tax moveOpens in new window ]
A protectionist trade policy approach could result in two outcomes for Ireland. The first is increased trade tension globally and reduced trade and FDI flows, which would negatively impact Ireland as an open trading economy. The second would be the potential for direct tariffs against Europe, including key sectors for Ireland like pharmaceuticals; again, not a good outcome for Ireland.
Tax reforms could influence the global investment landscape, potentially slowing FDI as companies reassess their strategies or just progress plans slowly. However, reduced tax rates must be balanced against increasing federal budgets and US debt. The US pulling out of the OECD deal brings uncertainty, but it will be at least a couple of months before we have more clarity on how this may play out and the potential impacts.
For Ireland, a lot will hinge on the impact on US operations’ intellectual property (IP), central to the international routing of revenues and the recent surge in Irish corporate tax revenue. Yet, if US rules change, the effect is likely to be gradual, not sudden.
Annually, the US is one of the largest beneficiaries of FDI in the world, and imposing tariffs risks retaliation and increasing domestic consumer costs.
The devil will be in the detail, the one thing we do not have. History offers reassurance. During Trump’s first term, Ireland continued to attract substantial FDI when similar concerns arose.
Multinationals operate with a long-term view that will outlast the traditional two-year window for presidents to implement key policies before the election cycle spins up again. To sell into markets outside of the US, American companies need bases outside the US. Despite potential policy shifts, Ireland’s appeal as a base for innovation and access to European markets remains strong.
So, we sit on our hands and see what happens? No.
Ireland cannot dictate US policy, but we can get our house in order. Competitiveness remains key. Investments in infrastructure and innovation are non-negotiable if we are to remain an attractive destination for FDI. However, persistent challenges threaten to erode our edge.
The slow pace of progress in addressing infrastructure shortfalls in areas like housing, energy, water and transport; the skills challenges facing Ireland; and the elevated cost of doing business in this country are what we should be focused on, rather than getting stuck on what president Trump might do.
It is welcome that Ireland’s Programme for Government document proposes many measures to address long-standing deficits in areas such as housing and infrastructure. Sustainable growth is also a priority, with the State balancing the sensible recognition of the central role that multinational investment in projects such as data centres plays in economic growth alongside the need to ensure efficient grid usage and fast-tracking of renewable offshore wind developments.
Policies and plans are only as good as their implementation. We must move past what we want and get to work implementing what we need to do.
[ Trump says he could reach trade deal with China after ‘friendly’ talks with XiOpens in new window ]
No single administration, protectionist or otherwise, can alter the fundamental drivers of what makes Ireland attractive: market access, talent and innovation.
It is easy to succumb to anxiety or pessimism in times of uncertainty. Ireland has weathered global challenges before, and it will do so again. Our unique relationship with the US has endured for generations. With careful stewardship, it will continue to thrive.
As we face the realities of president Trump’s second term, the best course of action is clear: focus on what we can control by executing policies that enhance our competitiveness, trusting in the resilience of our long-standing relationship with the US and maintaining a consistent message that Ireland is open for business. If the incoming Government wanted to adopt a credo – it might be execution, execution, execution.
Martin Shanahan is a partner and head of industry at Grant Thornton
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