Behind a sea of smiles and shamrocks in the Oval Office Micheál Martin, the taoiseach, is navigating a tricky trade relationship with the United States.
In recent decades the Irish economy has benefited significantly from the investment of American companies, with many making use of the country’s low rate of corporation tax.
“We have described Ireland as the 51st state from an investment point of view for quite some time … particularly in relation to foreign direct investment with US companies and their decision to base their operations in Ireland,” Dermot O’Leary, chief economist of the stockbroker Goodbody, said.
In his annual visit to the White House ahead of St Patrick’s Day, Martin is trying to shield the country from the escalating impact of tariffs.
Despite being a nation of only 5.4 million people, Ireland runs the fourth largest trade surplus for goods with the United States after China, Mexico and Vietnam, exporting €72.6 billion to the country in 2024. But the Irish government is at pains to remind President Trump that Ireland had a €134 billion trade deficit in services from the US in 2023.
Yet, with a US president focused on goods, Irish officials remain nervous about what could be coming down the line as Trump’s trade war escalates.
Ireland is home to nine of the ten largest pharmaceutical companies in the world with Pfizer, Eli Lilly, Johnson & Johnson among them. The country exported $50 billion of pharmaceutical products to the US in 2024, according to the US Census Bureau data.
Speaking at the White House on Wednesday, Trump said: “All of a sudden Ireland has our pharmaceutical companies, this beautiful island of five million people has got the entire US pharmaceutical industry in its grasp.
“There’s a massive deficit that we have with Ireland and with other countries too. We want to even that out as nicely as we can.”
Edgar Morgenroth, a professor of economics at Dublin City University, said: “When it comes to goods Ireland is far more exposed to sanctions of any kind by the US. It clearly is a worry if there is a blanket tariff on all exports from the EU to the US. It will hit Ireland worse than any other EU member.”
Over at Boann Distillery, in County Meath, the family-run business has been exporting for more than three decades and the US market makes up 30 per cent of its revenue. The company experienced the impact of tariffs in 2018.
“Unfortunately the price on the shelf of the cream liqueur had to go up and I suppose all the other Irish cream liqueur producers were in the same boat so everybody had to go up,” Peter Cooney, the co-founder of Boann Distillery, said.
This time around the business had started shipping extra stock in November 2024 for stockpiling to mitigate the impact of tariffs.
“We do have a lot of finished products in America in warehousing which will have paid the lower duty if the tariff is imposed,” Cooney said. “Nobody is winning here, the only people to lose out are the actual consumers in America and Europe.”
The presence of American companies is significant with one in ten private sector workers in Ireland employed by a US business. However, with discussions about tariffs ongoing between the US and the EU, Ireland will be hoping for a resolution.
“We’re in that period at the moment of trying to bring some stability to some of those discussions. I think we in Ireland in particular are very much focusing on the strong and proven relationship there has been between Ireland and the US over many decades,” said Michael Lohan, chief executive of IDA Ireland, the government agency responsible for foreign direct investment.
There are concerns that the introduction of tariffs or tax changes could lead American companies to move their sites back to the US in a wave of on-shoring. Any shift would impact Ireland’s finances as 28 per cent of the country’s tax revenues come from corporation tax.
“There are many risks associated with the kind of policies that the Trump administration has laid out, especially for a small open economy like Ireland,” O’Leary said.
In recent years the nation’s balance sheet has only become more reliant on taxes paid by American companies, with corporation tax receipts climbing from €4.6 billion in 2014 to €28 billion in 2024. The rise has coincided with American multinationals onshoring their intellectual property to Ireland.
O’Leary said: “To replace manufacturing, facilities, capacity skills and to shift them to the United States would take more than a presidential term … I would be more concerned about the on-shoring of intellectual property activity — invisibles — rather than the visibles like pharmaceuticals or medical devices.”
As the country gears up for St Patrick’s Day celebrations, the Irish government has sought to highlight the two-way relationship between Ireland and the US. However, as tensions between Trump and the EU escalate there are some concerns in Dublin that the luck of the Irish may run out.
