Trump has just crushed Ireland's European dream

Telegraph

16-05-2025

To govern, as the adage goes, is to choose. But for decades, Ireland didn't have to.
Since the 1990s, it has pulled off a delicate balancing act as both a dutiful member of the European Union and a continental tax haven for America. It pocketed EU subsidies while luring tech giants from Silicon Valley. Brussels paid for the roads; Big Tech filled the coffers. For years, Ireland posted the fastest growth in the developed world. The trick, it seemed, was not choosing at all.
But the global order that made that trick possible is coming apart. As Europe braces for Trump's tariffs, Ireland stands uniquely exposed: a victim, in a way, of its own spectacular success. It now holds one of the largest per capita trade surpluses with the US. A mere ten American firms contribute 60 per cent of its corporate tax revenue. Some 350,000 jobs, in a nation of five million, depend on US companies. No other European capital has quite so many eggs in someone else's basket.
For years, it fended off Brussels' attempts to crack down on tax loopholes, shielding its golden goose. At the same time, it chose ever-closer integration with Europe. Sovereign powers – over trade, monetary policy, even fiscal discretion – have been surrendered piecemeal to Brussels. The post-crash years saw a car boot sale of much of what remained.
'It's the economy, stupid' became gospel. But now, with Trump plotting a sequel to his 'Liberation Day' offensive on global supply chains and the EU preparing retaliatory tariffs, that doctrine is wearing thin. Tethered to one bloc and dependent on the other, Ireland is quickly running out of room to manoeuvre: all it can do is send polite letters to Brussels and hope domestic price rises force Trump to reverse ferret
The tension isn't just economic. Brussels and Washington are pulling Ireland in opposite directions ideologically, too. Last week, the European Commission handed down a two-month ultimatum for Ireland to pass overdue hate speech legislation or it would force Dublin to comply via the courts. The law, shelved last year, would give authorities sweeping powers to prosecute ill-defined speech crimes. The government blamed its failure to pass on a lack of 'consensus'. In truth, it was ineptly drawn up, and the public hated it.
The Americans weren't thrilled either. The law could, in theory, apply to users of US social media platforms – many of which are headquartered in Dublin. Elon Musk had offered to fund legal challenges. American lawmakers, including then-Senator JD Vance, warned Dublin to tread carefully. He wrote to the Irish ambassador: 'If this were happening in Russia or China… we would call it totalitarian and threaten economic sanctions'.
Voltaire, when asked on his deathbed to renounce Satan, is said to have replied: 'This is no time to be making enemies.' Dublin might consider the same.
Trump has already singled out Ireland as a key culprit in 'taking our pharmaceutical companies away.' Fresh tariffs on the sector are reportedly in the works and the industry is scrambling to ship out what it can. Pharma exports to the US from Ireland – now, improbably, the world's third-largest exporter – surged to €28 billion in March, up from €5.5 billion a year earlier. A boom, certainly, but with all the hallmarks of a coming bust.
Reshoring the industry would be slow and painful. Some firms may grit their teeth and wait Trump out. But he has other levers. Many US companies book global profits and intellectual property in Ireland, inflating GDP figures to surreal levels: 34 per cent growth in 2017, on paper , at least. A single tax tweak from Washington could knock billions off the Irish economy practically overnight.
As recently as January, Dublin was still encouraging a kind of strategic optimism. 'Don't take Trump literally,' was the official line. That line has since disappeared. With the prospect of failed talks between the US and EU looming, ministers are preparing for a lean year. There will be no cost-of-living relief. And forgotten terms like 'budget deficit' are once again being used around the cabinet table. One forecast projects tax receipts dropping to 2020 levels, leaving Ireland €15 billion in the red by 2030.
For decades, Ireland thrived by outsourcing its hardest choices: Brussels made the rules; America brought the cash. It was a comfortable arrangement, while the liberal order held.
But that consensus is collapsing. Both sides are preparing tit-for-tat tariffs. The EU is narrowing the limits of permissible speech, while the US, under Trump, is likely to retaliate if Ireland enforces those restrictions. Neither is offering much room for ambiguity. And ambiguity, it turns out, was Ireland's real national strategy.
The age of not choosing is over. The only question now is who will choose for Ireland – and what the price will be when they do.