US-Ireland trade deficit at record on pre-tariff pharma imports

Deficit more than doubled in March

Many of the largest US drug companies, including Eli Lilly and Pfizer, have outsourced much of their manufacturing to Ireland, lured by the country’s favourable tax environment. Picture Dan Linehan

The US merchandise-trade deficit with Ireland soared to a record in March on a massive inflow of pharmaceuticals and medicines, likely a preemptive move by drug companies to front-run expected tariffs.

The shortfall with Ireland more than doubled to a seasonally adjusted $29.3bn (€25.9bn) — larger than the US’s $24.8bn (€21.9bn) goods deficit with China. It was also wider than two other major US trade partners, Canada and Mexico. Overall, the value of imports from Ireland was twice the total brought in a month earlier.

Trade data released Tuesday showed US imports of pharmaceutical preparations jumped 71% in March to a record $50.4bn (€44.5bn). The increase dwarfed the pickup in inbound shipments of other goods such as capital equipment, other consumer goods and motor vehicles. It was largely responsible to pushing to total US trade deficit to a record.

Because most of the surge in consumer goods imports was overwhelmingly a result of drug imports, it tempers the narrative that retailers have been stocking up on foreign-made goods ahead of President Donald Trump’s tariffs.

Trump said in late February he would likely impose tariffs on pharmaceutical imports, and warned drugmakers in a private meeting that tariffs are coming. While those were excluded from expansive tariffs announced April 2, the president has said a decision will be made in the coming weeks.

A deeper examination of the Commerce Department’s more detailed trade data shows the customs value of pharmaceuticals and medicines imported from Ireland increased to nearly $28bn (€24.7bn) in March. The pace of monthly drug imports from the nation has accelerated since the end of 2024.

Many of the largest US drug companies, including Eli Lilly and Pfizer, have outsourced much of their manufacturing to Ireland, lured by the country’s favourable tax environment. American pharmaceutical firms operate nearly two dozen Irish factories that ship products to the US, according to a Food and Drug Administration database.

Merck & Co. has been stockpiling doses of the world’s best-selling medicine, the cancer immunotherapy Keytruda, which is primarily manufactured in Ireland. The company said April 24 that it had onshored enough doses of the drug to satisfy US demand through 2025, allowing it to skirt any future tariffs on a drug that accounts for nearly half its annual revenue.

Bloomberg