Ireland faces a bigger threat from the US than just tariffs
Eli Lilly, which has major operations in Cork and Limerick, said it will invest $27bn (€25.7bn) in new manufacturing plants in the US.
The cross-Atlantic trade relationships are fracturing at an alarming pace and EU leaders are rushing to get in line for one-on-one with sessions with President Donald Trump, all trying to understand the likely fallout for each one’s economy and how to protect their trading companies.
In this chaotic scramble, the St Patrick's Day White House Shamrock event looks like offering Taoiseach Micheál Martin a much-coveted opportunity to try and maintain the special Irish relationship with the US and hopefully protect Ireland’s export industry.
The immediate concern is the US President’s threat to impose across-the-board 25% tariffs on the import of goods from Europe. The Taoiseach will need to take a leaf out of Keir Starmer’s White House playbook and point out that the balance of trade between Ireland and the US is balanced when goods and services are taken into account.
However, the Taoiseach will have a tougher job trying to persuade Trump to ease off his demand for US corporations to bring home their foreign-based manufacturing, which is likely to do long-term damage to both existing and future US investment in Ireland.
To offset some of this demand, Micheál Martin may need to pledge some material incentives to increase the size of Irish business investors in the US, to offset any damaging focus on specific transatlantic Irish trade.
With Irish tech exports to the US surging to over €1.1bn in 2023, the USA has solidified its position as the largest export market for Enterprise Ireland tech companies. The Taoiseach would be on safe ground offering to incentivise Irish firms to increasingly set their sights on further scaling operations across the Atlantic. The already planned Irish Startup Week in New York scheduled for October by Digital Irish is focused on providing a platform for Irish start-ups to learn and forge connections to help their growth in the USA. The event is already sponsored by Enterprise Ireland and could be another key chapter of the playbook on the St Patrick's Day game with Trump. The spin that will aim to deepen ties between the Irish and US startup ecosystems and accelerate the growth of Irish businesses in America, is already part of the EI work plan.
Such pledges, in the current MAGA era, have value to a President who once vowed to run the country like a business, regardless of their eventual success. Besides providing a good headline for Trump, it also provides a chance to burnish his self-created image as a “dealmaker.”
However, the Taoiseach will have little influence over the US multinationals located in Ireland, who are being moved by Trump's stated desire to jump-start the manufacturing sector by inducing companies to base production in the US or face tariffs on the goods they export into the country.
In February, President Trump announced an “America First Investment Policy,” which focuses on promoting foreign investment into the US from allies and partners while raising tariffs and blocking investments into adversary countries. This will have significant implications for investors in Ireland.
Apple was one of the early responders and, after a meeting with Trump last month, announced what it called its largest-ever spending commitment, saying it will invest more than $500bn (€475.4bn) over the next four years in US jobs and facilities.
It’s hardly a coincidence, surely, that the four-year span exactly tallies with the current president’s tenure. The hanging threat of tariffs that will apply to companies which import their products, as Apple does, may have been another spur to this and may encourage companies like Foxconn, which manufactures many of Apple products, to move facilities in the US.
Ely Lilly was next to announce a major investment of $27bn (€25.7bn) in new manufacturing plants in the US, the latest corporation to bow to Trump's demands. At the end of January, Ely Lilly unveiled its most ambitious expenditure in a high-profile press conference dubbed “Lilly in America.” It more than doubles what the company has earmarked for domestic US manufacturing. Again, it is no coincidence the announcement is over a four-year term.
Now whereas this investment will take time to be activated, in the longer term it will most likely lead to under-investing in the Apple and Ely Lilly Irish plants, as the newer and tariff-protected plants in the US come on stream.
