Pharma exports from Ireland doubled 'to avoid Trump tax bills'

Extra.ie​

08-05-2025

Pharma exports from Ireland to the US multiplied in February and March as firms rushed to avoid Donald Trump's huge tariffs.
Around half a year's supply of medicines, worth $ 42 billion, were shipped to the US from Ireland and stockpiled in advance of the US president's sweeping 'Liberation Day' charges.
Mr Trump has repeatedly declared that he intends to target Ireland's pharma industry, a key driver of our corporation tax receipts. US President Donald Trump. Pic: Doug Mills-Pool/Getty Images
One economist described the export figures as 'gargantuan' and aimed solely at avoiding tax.
'They knew the tariffs were coming and they massively ramped up shipments to get in ahead of the tariffs, it's as plain and simple as that,' said Dan O'Brien, chief economist with the Institute of International and European Affairs in Dublin.
'It's incredible numbers. Basically, it means the pharma sector has ramped up production and is shipping everything it possibly can before potential tariffs hit.'
In his April 2 announcement, Mr Trump imposed a 25% tariff on the EU, which has since been paused for 90 days, but pharmaceuticals were excluded.
However, US Commerce Secretary Howard Lutnick told Tánaiste and Trade Minister Simon Harris in advance of this that sector-specific tariffs would follow, which has left the Government and the industry bracing for a major shock. US Commerce Secretary Howard Lutnick. Pic:)
Last month, Mr Trump said tariffs on pharmaceutical goods would come in the 'not too distant future'.
'We don't make our own drugs, our own pharmaceuticals – we don't make our own drugs anymore. The drug companies are in Ireland, in lots of other places, like China. And all I have to do is impose a tariff. The more, the faster they move here,' he said.
Data released by the United States Census Bureau, the American equivalent to the Central Statistics Office (CSO), this week explicitly highlighted the increase in the deficit between the US and Ireland between February and March.
The deficit with Ireland increased $ 15.3 billion to $29.3 billion in March. Exports increased $ 0.1 billion to $ 1.4 billion and imports increased $ 15.5 billion to $ 30.7 billion,' the bureau said.
Some $ 14 billion of the $ 15.5 billion in February related to pharmaceutical goods, while $ 28 billion of the $ 30.7 billion in March related to pharmaceutical goods being exported into the United States from Ireland. That's $ 42 billion of pharmaceuticals over February and March. Pharma exports from Ireland to the US multiplied in February and March as firms rushed to avoid Donald Trump's huge tariffs. Pic: Getty Images
Economist Mr O'Brien said the impact on the Irish Exchequer would likely be that these companies would send their taxes to Revenue 'earlier than expected' and 'bring forward the booking of profits'.
He said it would 'lead to a bump in corporation tax, followed by a fall back'.
Mr O'Brien warned that it 'could also lead to some reduction in staff levels, if they have really ramped up production' but that this was unlikely due to the highly technical nature of these jobs, but said it remained a risk.
Economist with the Council on Foreign Relations, Brad Setser, who reviews the data on an ongoing basis, said the numbers were 'crazy'.
He said the figures had occurred because the US and EU pharmaceutical companies decided to avoid any tax ahead of the tariffs. Mr Setser said that pharmaceutical companies in Ireland were exporting around € 5 billion a month to the US last year, but March's figure was an increase by a factor of five.
'It would suggest several firms have moved supply for much of the year into the United States,' he remarked.
He said if the figure were annualised, it would represent half a percentage point of the United States' GDP.
'If anyone was in any doubt, companies were moving at least a half year's supply into the United States [ahead of tariffs].'
'There is no doubt that Ireland is the global centre of tax avoidance by American pharmaceutical firms and Singapore is a distant second,' he added.
'The tariffs are a frontal blow to Irish pharmaceutical tax avoidance,' he added.
An Irish Pharmaceutical Healthcare Association spokeswoman said it is not in a position to comment on the figures.
Enterprise Minister Peter Burke previously said that an increase in exports in January was 'not specifically' due to stockpiling by pharmaceutical companies.
Speaking last month, he said: 'You'd be very much aware that our pharma exports are very complex. We do know the amount we export. About 84% of those products are incomplete, and that poses a very significant challenge.'
The Government has moved to support the pharmaceutical sector in recent months. In April, a number of large pharmaceutical companies warned about the EU's lack of competitiveness in the sector.
The European Federation of Pharmaceutical Industries and Associations (EFPIA) conducted a survey of its members last month on the matter, to which 18 replied
It identified as much as 85% of capital expenditure investments (approximately € 50.6 billion) and as much as 50% of R&D expenditure (approximately € 52.6 billion) potentially at risk across the EU.
The CEOs called for immediate action on achieving a competitive EU market that attracts, values and rewards innovation in line with other economies at the forefront of patient care.
They also called for a strengthening, rather than weakening, of Europe's intellectual property provisions.
They also said that the EU should adopt a 'world-leading' regulatory framework, conducive to innovation, and that it should ensure 'policy coherence' across 'environmental and chemical legislation' to secure a resilient manufacturing and supply chain of medicines in Europe.