Ireland\’s economic miracle threatened by tariffs

Irish Economy Faces a New Transatlantic Trade Test

At the heart of Ireland’s commercial power hubs, an American pharmaceutical giant has set up a headquarters in Ringaskiddy, near Cork. The campus is one of many that attract major U.S. multinationals, drawn chiefly by Ireland’s low corporate tax regime, an English‑speaking workforce and a strategic location within the EU.

From “Celtic Tiger” to Corporate Tax Champion

• In the 1990s, Ireland transformed from one of north‑western Europe’s poorest nations into a thriving investment destination.
• Businesses like Pfizer, Eli Lilly, Johnson & Johnson and tech firms such as Apple, Google, Meta established their European headquarters here.
• The influx of U.S. investors has pumped Irish tax coffers and created record budget surpluses in recent years.
• Last year Ireland raised its corporate tax rate from 12.5 % to 15 % after pressure from the OECD.

Economic Growth and U.S. Dependence

Louis Brennan, professor of business studies at Trinity College Dublin, called Ireland’s recent turnaround an “Irish economic miracle.”

Dan O’Brien, director of the IIEA think tank in Dublin, warned that the country’s heavy reliance on American companies could expose it to future trade risks.

Pharmaceutical Industry Frontline

U.S. tariffs are now targeting Portugal’s pharmaceutical giant, with the administration aiming to repatriate production to domestic soil.

Earlier this month the U.S. president threatened a 200 % levy on the sector. President Micheal Martin of Ireland welcomed the U.S. 15 % deal, but noted that higher tariffs would make transatlantic trade “more expensive and more challenging.”

Impact on Irish Exports and Employment

• Pharma employs about 50,000 people and accounted for nearly half of Irish exports last year.
• The sector’s exports reached €100 billion, up 30 % year‑on‑year.
• U.S. tariffs risk strongly discouraging American companies from setting up future factories in Ireland.

Andrew Kenningham of Capital Economics suggested that U.S. changes to its tax regime could further diminish the attractiveness of low‑tax jurisdictions like Ireland.

Despite the looming tariff threat, tech firms with EU bases in Dublin, which have also transferred part of their intellectual property rights, will not be directly impacted by the imposition of tariffs on physical goods.