Trade, tax and security: what Donald Trump’s victory means for Ireland

Ireland, along with its EU partners and the rest of the globe, wakes up to a changed world this morning as the stunning victory of Donald Trump in the 2024 US presidential election takes shape.
Politicians and officials in Dublin and across the EU had expected to watch and wait, perhaps for days, for the result in the most closely fought, and bitterly contested, American presidential election in history.
But in the end, it won’t even be that close. Hopes that a late, late swing towards Harris, driven by women and younger voters, would arrest the perceived advantage of Trump in the second half of the campaign came to nought. The picture that emerged first slowly and then quickly after about 4am Irish time was clear: a wave for Trump.
So this morning, over strong coffees, political leaders in Dublin and all over Europe are turning to their officials and asking: what now? What does this mean for us?
For Ireland, the big fact is that the relationship between EU and the US is going to change dramatically. The immediate concerns revolve around three principal areas: trade, tax and security.
Trump has been categoric about his intentions to slap tariffs on EU imports. “They don’t take our cars, they don’t take our farm products, don’t take anything. You have a $312 billion deficit with the EU. You know, the EU is a mini – but not so mini – is a mini China,” Trump has said.
If Trump, as seems likely this morning, enjoys the backing of a Republican-dominated Congress, there will be few barriers in his way to hit – as he has promised – European exports to the US with 10 to 20 per cent tariffs
The EU, for its part, has been preparing carefully for the second Trump presidency. Officials say that they have prepared a playbook of responses to moves by the US, up to and including the prospects of a full-scale trade war. Officials have been briefing that they will hit back hard and quickly with their own tariffs on US imports if Trump moves.
For Ireland, the EU member state with the closest relationship with the US and with American multinational companies making up a huge part of its economy, the concerns are acute. But trade is an EU competence; policy will be made in Brussels, not Dublin, with the interests of the EU’s economy as a whole uppermost – not the unusual (and much envied) Irish economic model.
Recently, chief economist with the Institute of European Affairs Dan O’Brien warned that a second Trump presidency was the “biggest near-term risk” to the Irish economy. The only question, he added, would be how bad it would be.
The Irish exposure extends beyond trade. Trump has spoken about his intention to lower the corporation tax rate from 21 per cent to 15 per cent – wiping out at a stroke the Irish advantage that has been a part of the extraordinarily lucrative success of the US multinational invasion here.
A wholesale exodus of US companies seems far-fetched, though. Many will still require a base of the EU, and in any case, a Trump presidency, however bad it is for Irish interests, can only last four years. Multinational companies think on longer horizons than that. But the challenges to the status quo in Ireland’s economic model seem obvious.
Ireland’s superpower has been to position itself between the EU and the US – integral to one but closely bound to the other through ties of commerce and culture. With the transatlantic relationship destined for – at best – a period of turbulence, navigating that will require from Ireland’s leaders political deftness and a clear-eyed appreciation of the national interest.
The necessity to lovebomb Trump with flattery is painfully obvious to everyone in Dublin. Next year’s St Patrick’s Day visit assumes a new importance, though it will inevitably be accompanied by understandable howls of outrage at home.
Then-taoiseach Enda Kenny managed to walk the tightrope with some skill when Trump was previously president, cosying up in the White House with maximum tooraloora but still making a powerful speech in defence of immigrants, citing the example of Ireland’s most celebrated immigrant, St Patrick. Varadkar joshed with Trump about fixing a planning permission.
The flattering of Trump will be manageable, if uncomfortable. The management of Ireland’s strategic interests will be less straightforward. The fact is that the global model of openness and free trade that Ireland has been so expert at exploiting in recent decades is in retreat. That trend may well outlast the second presidency of Donald Trump.
Perhaps that most unpredictable element of the future US-EU-Ireland relationship will be on security.
Trump has hinted heavily that he would back a land-for-peace deal in Ukraine (imagine how they are feeling in Kyiv this morning; or in Moscow). If he makes US military aid contingent on such a deal, Ukraine will have little choice but to accept it. The EU is simply not capable of providing the aid Ukraine needs to keep fighting the war – at least in the short-term – on its own.
That would inevitably mean that EU member states – especially those in the east with a relatively recent memory of Russian domination – will seek much greater defence and security co-operation in the future. To an extent that is happening already. It will now be turbo-charged with Trump’s win. Appreciating the niceties of the Irish position on neutrality – and its reluctance to become involved in Europe’s defence – might become a minority pursuit in Brussels.