In the arena of commerce, Irish folks are often characterised as preferring amicability over intimidation. We are generally congenial, generous in a reasonable measure, engaging and enjoy a good jest. Our desire to be perceived positively typically makes us well-liked and non-threatening, marking us out as effective salespeople. We usually opt for keeping conflicts at bay rather than fuelling them, ultimately resulting in us not often expressing our actual thoughts, but rather toning them down.
Compared to us, individuals from other countries are more inclined to prioritise assertiveness over popularity, regardless of the discomfort it might cause, even if it could potentially cause discomfort to others. A typical individual from Ireland, however, tends to prefer a harmonious co-existence.
Successfully maintaining such a balance necessitates a plethora of friends, or patrons, on an international level. We are perfectly aware that we abide by rules rather than establish them, and employing a blend of charisma and shrewdness, we endeavour to persuade larger entities to comprehend our standpoint, slightly tweak the rules in our favour, and not delve too deeply into potential discrepancies. This strategy has predominantly yielded beneficial results in sectors like economics, diplomacy and trade, occasionally earning us the status of an exception.
This notion of Irish uniqueness is particularly prominent in the relationship dynamics amongst the European Union and the United States, wherein Ireland appears to have a stake in both camps. However, such uniqueness essentially hinges on the indulgence offered to us by the rest of the globe. Over the past 3.5 decades, post the Berlin Wall demolition, the global order facilitated an affable, conversational Ireland in its operations. Could Autumn 2024 indicate the conclusion of the 35-year epoch of Irish distinctiveness?
In Ireland, caution is advised: Trump harbours intentions of repatriating American capital and employment opportunities.
Only a single resident remains on Dublin’s O’Connell Street. The area is not deficient in security personnel, but rather inhabitants.
Sanctions on Israel may not be on the immediate horizon, but war times can induce swift changes.
Why, within the span of 12 years, have Irish electricity tariffs almost tripled, while their equivalents in Scandinavian nations are half the amount?
Our misuse of the relationship with the European Union came to the forefront with the judgement on the Apple tax issue, a revelation the government did not openly admit until the European Union court delivered its verdict against us. As opposed to our generally well-regarded image in Brussels, we are now viewed by some as dishonest. Simultaneously, the growing likelihood of Trump’s administration in Washington could potentially halt the multinational extravaganza that has largely contributed to our wealth. We must understand clearly – Trump’s intention is to repatriate American funds, jobs, technology, and investments. In his previous term, this was merely a discussion point, but current indications point towards his and his team’s serious intent this time around.
Howard Lutnick, Cantor Fitzgerald’s chief and crucially the co-chair of Trump’s transition team, expressed this sentiment recently on X. He criticised the fact that Ireland, of all nations, enjoys a trade surplus generated at America’s cost. He noted that America’s manufacturing sector seems hollow, with even prestigious American automobiles being produced in Mexico. According to him, terminating this absurdity will aid America in regaining its former glory. His statement carried a clear warning for us.
Lutnick’s reference to Ireland, and the connection he drew between our trade and budget surplus and wrongly-acquired American funds, reveals his thought process. His ‘Make America Great Again’ (MAGA) strategy notably includes the repatriation of American business.
On some level, Ireland profited from the failings in Trump’s initial tenure. However, what will the scenario be if competent technocrats from the Heritage Foundation, an institute that supports an isolationist and ‘America First’ outlook and possesses a comprehensive understanding of Washington’s bureaucratic workings, join the potential new administration?
It seems multinational corporations have not been responding to Trump’s threats thus far, with the latest Foreign Direct Investment study suggesting that 56% of respondents plan to increase their Irish workforce in the forthcoming year, while 35% plan to retain their current workforce size.
The Irish economy is heavily dependent on the significant contributions of American multinationals, as shown by the data. According to The American Chamber of Commerce Ireland, 970 American corporations directly employ 210,000 individuals, making up 7.7% of overall employment. Additionally, these organisations indirectly employ 168,000 more, leading to a total of 378,000 jobs, or nearly 14% of all employment. An annual spending of €41 billion is invested into the Irish economy by these firms, with roughly €7 billion specifically allocated for employee salaries.
The Irish Business and Employers Confederation states that for every €1 million spent on the Emerald Isle by US firms, about three jobs are created. Additionally, Ireland is responsible for 8% of the overall US research and development expenditure across the European Union, a significant share given its population only represents 1% of the continent. It’s projected by the Department of Enterprise, Trade and Employment that foreign direct investment (FDI) directly led to the creation of eight supplementary jobs in the broader economy for every 10 jobs created, indicating that FDI supported over 540,000 direct and indirect jobs by the end of 2023.
Despite political changes in the US, multinational corporations continue to see Ireland as a favourable ground for expansion, with 56% of respondents in a recent FDI survey planning to increase their Irish workforce within the next year. A further 35% intend to maintain current staffing levels. These plans follow a trend where 69% of participants reported boosting their Irish staff numbers in the preceding year.
In terms of taxation, the €26.4 billion generated from corporation tax last year accounted for 27% of Ireland’s total revenue, a striking contrast to the UK’s less than 10%. Foreign-owned multinationals, particularly US ones, were responsible for a significant 84% of corporation tax. The top 10 companies, including Google, Meta, Apple, Pfizer and Intel, contributed more than half of this sum. As reported by Economics for Inclusive Prosperity, a staggering 40% of global multinational profits are moved to tax havens annually, leaving the US with an estimated 15% decrease in its corporate income tax revenue. A move is underway in America to retrieve these lost funds.
In a global environment of unrestricted commerce and minimal tariffs, these data points favour globalisation. However, from the perspective of Make America Great Again (MAGA) campaign, the narrative differs considerably. It posits that US workers have been usurped by a mercantile elite who has redirected American funds and employment opportunities abroad, transforming countries like Ireland from allies to accomplices in this financial plunder.
Evidently, Trump is keen on steering us towards an era rife with international trade conflicts, imposition of tariffs, and retaliating against American corporations investing overseas. As he stated during his campaign – US companies manufacturing outside the country will be welcomed by substantial tariffs when they import their products back into the states. His proposed cure for America’s woes consists of a cocktail of imposing tariffs and proposing tax incentives aimed to dissuade offshoring and to lure corporations into domestic manufacturing.
For American patriots, this approach rings true and appeals to wage earners, making it understandable why not only the Caucasian working class but, in an unprecedented turn, also a segment of the African-American labour force, wish to vote Republican.
From the viewpoint of someone based in Dublin, Trump succeeding would signal a tectonic shift in the city’s overall international approach. The tactful diplomacy of the Clinton, Bush, Obama, and Biden era marked by the symbolic Irish shillelagh and shamrock, has seen its days. With their friends no longer in powerful positions, being amiable won’t suffice. The successors might not only be indifferent towards Ireland but could harbour antagonism. They view Ireland’s exceptionalism, in tax evasion or hitching a free ride with NATO (an offence to them, not so significant for us), as taking undue advantage.
A victorious Trump might cause us to rethink our approach and discover that amicability and wit aren’t enough. With dwindling allies in Brussels, where does Ireland’s future lie?
This year’s US election coincides with the 35th anniversary of the Berlin Wall’s collapse. Perhaps, in hindsight, historians will view the past three decades as Ireland’s golden era.