The US election: What does it mean for Ireland and the EU?

The American election took place on the 5th of November, between Kamala Harris and Donald J. Trump. The world looked on with with apprehension as it awaited the results.  

What does the second election of Trump mean for the international community, in terms of economics and policy making? It is well known that Trump is not liked by multiple nations for his previous approach to politics, but also his convicted crimes and pending criminal charges. 

The most important discussion at the moment is the issue of Trump’s pledge on tariffs. This could pose a major problem for the Irish and European economy. He wants to make a reduction in company tax in the US, which is currently at 21%, as s well as a general 10–20% import tariff on non-American made items.  

With a thousand American companies in Ireland contributing to Ireland’s total Gross Domestic Product (GDP), there is a concern that these low tariffs could deter these companies and cause the Irish economy to suffer. 

“I believe this is concerning everyone since Ireland is home to some of the most powerful technology companies in the world today,” economist Darragh O’Donoghue said. “We have Google, Microsoft, and Apple, to name a few, and they have boosted the Irish economy by an average of 13% and brought in a total income of €46.66 billion Euro, which is an astonishing amount of capital.

“But the main problem is how reliant the Irish Economy is on American companies.”  

The existing corporate tax rate is 12.5% for companies with revenues below €750 million and 15% for companies that have more. Following Brexit, Dublin rose to the top of the list for US corporations looking to establish EU headquarters.  

The United States was Ireland’s greatest export market in 2022 and 2023, accounting for more than €63 billion in exports. This represented 30% of the overall worth of exports. Germany was the second-largest export partner, with €25 billion in exports, subsequently followed by the United Kingdom with €22 billion. 

Medical and Pharmaceutical products and organic chemicals accounted for €44 billion, which is roughly 70% of the total amount exported to the USA. 

“There are 970 US companies in Ireland as of 2024, and these companies employ 210,000 people, and spend on average €41 billion euro in the local Irish economy annually,” O’Donoghue continued, “So, losing them would cause a huge blow not only to the economy, but the people they employ.” 

While the focus is mainly on Ireland, this would also be a blow to the European economy as well, and Ireland is a net contributor to EU funds.  

The total value of Irish exports to the 27 EU countries exceeded €80 billion, and while small in comparison to the biggest contributors, France, Germany and Italy, it’s still a staggering amount for such a small nation. 

There is some argument that this economic model Ireland has chosen, relying on the US, wasn’t going to be a long-term solution, and at some point, the momentum would come to a grinding halt.  

It remains to be seen whether Trump will carry out his plan on imposing tariffs and lowering corporate tax. The European Union is already preparing for a worst-case scenario, but we’ll see what will happen come his inauguration in January.