Data shows just how dependent Irish-US trade is on only a few sectors
Some of the biggest US pharmaceutical companies — including Pfizer, Eli Lilly, and Johnson & Johnson — have significant operations in Ireland.Â
US president Donald Trump has only been back in office for just over a month, but he is already engaging in trade wars with other countries in order to gain concessions.Â
While there has been much bluster from his administration in recent weeks, the EU, and in turn Ireland, have largely escaped being dragged into a trade war with the US, but that all could change soon.
Earlier this week, Mr Trump said he would likely impose a 25% tariff on cars, semiconductors and pharmaceuticals — with an announcement coming as soon as April 2 — a move which would dramatically escalate his trade war and put the EU in the crosshairs.
He also warned the tariff could go up even higher over the course of the year.
Mr Trump has already placed tariffs on US imports — a 10% tariff on goods coming from China, as well as a 25% tariff on steel and aluminium imports. He also tried to impose a 25% tariff on imports from Canada and Mexico, but ultimately backed down.
The US president also recently promised to impose “reciprocal tariffs” against other countries, with EU members being in the crosshairs, adding he views value-added tax — which is placed on almost all products sold in Ireland regardless of point of origin — as a tariff.
In addition to Mr Trump’s comments and threats, the US senate also confirmed outspoken billionaire businessman Howard Lutnick has been confirmed as Donald Trump's commerce secretary, where he will be front and centre as the US executes its latest trade war.
Mr Lutnik has been a vocal critic of Ireland and the country’s recent run of strong budget surpluses.
All this is setting the stage for an eventual trade war between the US and EU, and given Mr Trump's particular focus on perceived trade imbalances with other countries, Ireland’s record high exports to the US — and minimal imports — could eventually become a target of his ire.
Ireland’s trading relationship with the US is largely one-sided. A point which was emphasised by the release of data from the Central Statistics Office (CSO) this week, which showed Ireland’s trade surplus reached just over €50bn in 2024.
Exports level hits record €224 billion in 2024https://t.co/D95jMruXuH#CSOIreland #Ireland #Trade #IrishTrade #Exports #Imports #Businessstatistics #IrishBusiness #BusinessNews #Brexit pic.twitter.com/F0VaAplvpH
— Central Statistics Office Ireland (@CSOIreland) February 18, 2025
During 2024, the value of Irish exports to the US rose by 34% to more than €72.6bn — 61% of which were medical or pharmaceutical products — while imports declined marginally by 2%, to €22.5bn.
Digging down into the data a bit further shows Irish imports from the US are highly concentrated in just two areas.
The largest import category by monetary value last year was “other transport equipment”, the vast majority of which is aircraft. Overall, this category accounted for nearly €7bn worth of imports during 2024, or 30.6% of all imports.
This is not surprising given Ireland’s concentration of aircraft leasing firms as well as Ryanair — which uses Boeing planes and ordered 300 new aircraft from the US manufacturer at cost of $40bn (€38.5bn) in 2023.
However, aircraft are mobile assets and they will be moved to other countries and airports depending on demand. As a result, their benefit does not stay in Ireland like other imports.
Boeing remains one of the two biggest airline manufacturers in the world, but has been struggling in recent years due to numerous safety issues as well as strike action by its workers. Being caught in a trade war between the US and EU would only make matters worse for the company, especially considering its chief rival is the European aircraft manufacturer Airbus.
Medical and pharmaceutical products made up €4.26bn worth of Irish imports from the US during 2024 — a tenth of what Ireland sent the other direction. However, it is not likely the EU will place an additional tariff on these imports, despite whatever actions Mr Trump takes, owing to a long-standing trade norm that exempts pharmaceuticals from tariffs because of their vital role in healthcare.
These two areas alone make up nearly 50% of all Irish imports from the US.
There were four other areas in which Ireland imported more than €1bn worth of products from the US, these include: power generating machinery and equipment; petroleum, petroleum products, and related materials; electrical machinery, apparatus and appliances; and professional, scientific and controlling apparatus.
In terms of everyday items Ireland imports from the US, clothing and other miscellaneous items accounted for €988.5m in 2024; telecommunications and sound equipment accounted for €221.1m; and beverages accounted for €173.4m.
Other common segments included raw materials, as well as large scale machinery.
The EU Commission has already said it would move quickly to impose tariffs on US goods entering the bloc should the US president follow through with his own tariffs, which could impact any of these categories.Â
How the EU might go about imposing these tariffs has not yet been detailed but in 2018 when Mr Trump first imposed tariffs, the EU responded by placing additional taxes on imports of orange juice, bourbon and motorcycles — all products produced in Republican-leaning states.
The EU will probably go down this route again, targeting specific industries in the US, which could result in prices going up on certain items.
Trade expert John Whelan said Europe was “reasonably balanced in terms of ability to continue trade without steel and aluminium coming from the US. So steel and aluminium would be a good one for the EU to tackle, to put tariffs on US exports.”
“I would think that that would be fairly high up the list.”Â
Mr Whelan added one of the biggest weapons the EU has over the US is services — particularly tech such as social media.
He said a weapon the EU has been reluctant to use is a potential charge on these companies “that would hit the people who are surrounding Mr Trump, hitting their products, makes him look unpopular".Â
"Europe is reluctant to use it, but it really depends on what Mr Trump does.”Â
Should Mr Trump try to target Irish exports, he is going to find they are also heavily tilted towards the US multinationals.
The total value of Ireland’s exports during 2024 stood at €223.8bn. This was buoyed by a very strong performance in the pharmaceutical and medical sector which alone accounted for €99.9bn — of which almost €44.4bn were shipped to the US.
The pharmaceutical and medical sector is by far the largest Irish export sector to the US, with the next closest category, organic chemicals, only sending €9.4bn worth of product to the country last year.Â
Pfizer, Johnson & Johnson, as well as Eli Lilly, all have significant operations here in Ireland and their primary export market is the US.
Chief executive of Pfizer Albert Bourla has said the company is vulnerable to US tariffs against the EU, where it has at least 10 plants.
“We are waiting to see how that could play out with the tariffs in places that have not been announced yet,” he said.
Pharmaceuticals have typically been exempt from tariffs, but Mr Trump has threatened putting import levies on the sector as part of a plan to increase overall manufacturing within the US.
Should the tariffs come into effect, and have the negative impact Mr Bourla expects, it will be interesting to see how the US stock market reacts.
Mr Whelan said there would be good reason for Mr Trump not to hit pharmaceutical companies in Europe because he would be hitting US companies "who primarily dominate the scene in Europe in terms of pharmaceuticals and medical devices".
"There are lots of other areas he could hit. It looks like he's going to go product by product, when it comes to Europe, rather than a single block right across the EU,” he said.
Mr Trump also threatened tariffs on computer chips, which could see US electronics prices increase but the added wrinkle here is Intel. The US chip manufacturer has a significant presence in Kildare, and having to deal with the extra pain caused by tariffs is not something the struggling company needs right now.
Mr Whelan said the chipmaker was already trying to move manufacturing to the US after the Biden administration “put massive funding behind Intel to create two fabrication centres in the US”.
He added Intel is “obviously in a bad way” and hitting it with tariffs would make it harder on the faltering tech giant.
Tariffs on cars is the one area Mr Trump might actually get some purchase on, but those industries are focused in other EU countries such as Germany and France.
Mr Whelan pointed out that there is a 10% tariff on US car imports into the EU while EU cars going to the US are tariffed at 2.5%.
One area where Mr Whelan believes the US can hurt Ireland, and the broader EU, is through tariffs on food and drinks.
"Europe has virtually no food from America,” Mr Whelan said.
"It's not our biggest market, but at the same time, if you're a niche exporter into the US of various foods, particularly the whiskey front, then you're in trouble. Butter obviously got a big hit the last time,” he said.
"I would think that's more likely going to be the area that would hit Ireland.”Â
Mr Trump sees tariffs on these products as a blunt tool to try and get companies to manufacture in the US again, but any such moves would take years to see through while the pain could be immediate for many businesses, the US economy and wider global economy.
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