Dan O'Brien, the chief economist at the Institute of International and European Affairs in Dublin, highlighted the potential impact of Washington imposing even a 10% tariff on EU goods, particularly underscoring the significant implications for Ireland.
Moreover, as Lilly announced a substantial $27 billion investment in US manufacturing in anticipation of potential tariffs, Ireland could already be feeling the pinch if Trump enforces his threat of imposing a 200% tariff on European alcoholic beverages, which would directly affect Irish whiskey. Additionally, from April 2 onwards, the US has declared its intent to apply reciprocal tariffs worldwide.
EY Ireland's Chief Economist, Loretta O’Sullivan, expressed concerns over the reliance on global supply chains based in Ireland, mainly in the pharmaceutical sector, with the majority of exports being in pharmaceuticals, indicating a significant vulnerability in this area.
Ireland, a nation highly dependent on attracting US multinational corporations, faces a potentially precarious situation, given its status as a base for major American companies like Apple Inc., Salesforce Inc., and Intel Corp. Trump noted the significant presence of US pharmaceutical companies in Ireland but emphasized that trade relations should be fair.
The potential ramifications of tariffs and trade disputes on Ireland, a major per capita goods exporter to the US in Europe, could be substantial, with experts like O'Brien raising concerns about the extent of the damage it could cause.
In response to these challenges, the Irish government is taking proactive measures, leveraging opportunities like St. Patrick's Day to engage with US policymakers and assert Ireland's economic contributions to foreign investments in the US.
The historical relationship between Ireland and the US, rooted in familial ties and economic cooperation, remains crucial, although the shift from former President Biden to President Trump poses different challenges. The reliance on Irish soft power and the diaspora in the US plays a significant role in navigating these diplomatic and economic obstacles.
With Ireland's evolving tax regime and economic landscape, including the advent of a 15% minimum corporate tax rate set by the OECD, the country faces scrutiny and challenges from the US and the EU, which could impact its budget surplus and trade relationships. The crossroads of global trade tensions and political engagements highlight the complexities of Ireland's position in the international arena.
In particular, Ireland's distinct stance on issues like the Israeli-Palestinian conflict and tech regulations sets it apart from its European counterparts, potentially making it a target for external pressures. The presence of major pharmaceutical and tech companies in Ireland further underscores the country's significance in global trade dynamics, particularly in the Cork area.
Eli Lilly's substantial investments and engagement with the local community in Kinsale exemplify the enduring relationships between international corporations and Irish regions, highlighting the multifaceted impacts of global trade dynamics on local economies and communities.