When it comes to business, one of the best descriptions of the Irish I have ever heard is that we prefer to be liked rather than feared. Affable, reasonably generous, good fun and chatty, most of the time we are up for a laugh. Wanting to be liked usually makes us popular and unthreatening – good salespeople. Uncomfortable with conflict, we tend to defuse rather than aggravate. This means we rarely say what we actually think, preferring to sugar-coat.
Other nationalities, typically, are less committed to being the most liked people on the planet, the best craic and the easiest company. They are often happier to say what they think, and take an awkward stand even if their interests impinge on others. Not so the typical Irish person, who prefers to have the best of all worlds.
It a balancing act that calls for many friends, almost patrons, internationally. We understand that we are rule-takers not rule-makers, and through a combination of charm and cunning we try to get bigger players to see our point of view, bend the rules a bit for us and not look too closely at possible anomalies. Such an approach in economics, diplomacy and commerce has served us well, allowing us at times to be treated as a bit of an exception.
Irish exceptionalism is most notable in the relationship between the European Union and the United States, where Ireland can be said to have a foot in both camps. However, Irish exceptionalism is based on the rest of the world indulging us. In the 35 years since the fall of the Berlin Wall, the international world order allowed a friendly, chatty Ireland to play its game. Could the autumn of 2024 mark the beginning of the end for 35 years of Irish exceptionalism?
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The Apple tax decision exposed our abuse of the EU relationship, one the Government denied until the EU court ruled against us. From being almost universally liked in Brussels, some now see us as cheats. Meanwhile, in Washington the very real prospect of a Trump administration could put an end to the multinational jamboree that has made us rich. Make no mistake, Trump wants to bring American money, jobs, technology and investment home. Last time around he only talked about it, but this time the evidence suggests that he – and his team – mean it.
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Last week Howard Lutnick, the head of Cantor Fitzgerald and more importantly the co-chair of Trump’s transition team, posted this on X: “It’s nonsense that Ireland of all places runs a trade surplus at our expense. We don’t make anything here any more – even great American cars are made in Mexico. When we end this nonsense, America will be a truly great country again. You’ll be shocked!”
The implication for us is stark: a large part of the Maga (Make America Great Again) policy will be bringing American commerce home. The fact that Lutnick name-checked Ireland and tied our trade surplus, and by extension our budget surplus, explicitly to purloined American money shows his line of thinking.
In many ways, Ireland was blessed by the incompetence of Trump’s first term. What happens if this potential administration is staffed by competent technocrats from the ranks of the Heritage Foundation – an isolationist, America First think tank that is equipped with the knowledge of how to pull the levers in DC?
On the ground, multinational companies certainly don’t seem to be responding to Trump’s provocations just yet, with the latest FDI survey revealing that 56 per cent of respondents expect to boost the number of employees in their Irish operations over the next 12 months, while 35 per cent expect to maintain current numbers
In terms of the Irish economy’s reliance on American multinationals, the numbers speak for themselves. The American Chamber of Commerce Ireland reports that some 970 US companies directly employ 210,000 people (7.7 per cent of total employment), with a further 168,000 employed indirectly, amounting to 378,000 in total (just under 14 per cent of all jobs). These companies spend some €41 billion in the Irish economy each year, with about €7 billion going directly to pay the wages of these Irish employees.
The Irish Business and Employers Confederation estimates the activity of US companies in the Irish economy generates almost three jobs for every €1 million spent in Ireland and the country accounts for 8 per cent of total US research and development expenditure in the EU, despite accounting for only 1 per cent of the Continent’s population. The Department of Enterprise, Trade and Employment calculates that for every 10 jobs generated by foreign direct investment (FDI) directly, another eight are created in the wider economy, suggesting more than 540,000 direct and indirect jobs were supported by FDI at the end of 2023.
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On the ground, multinationals certainly don’t seem to be responding to Trump’s provocations just yet, with the latest FDI survey revealing that 56 per cent of respondents expect to boost the number of employees in their Irish operations over the next 12 months, while 35 per cent expect to maintain current numbers. Those are particularly strong numbers on the back of 69 per cent of respondents suggesting they had increased the number of Irish employees over the past year.
From a tax perspective, last year’s €26.4 billion in corporation tax revenue constituted 27 per cent of Ireland total receipts. Compare this with less than 10 per cent in the UK. Foreign-owned multinationals accounted for a highly concentrated 84 per cent of all corporation tax. The 10 largest companies accounted for more than half of all receipts – the majority are American (including Google, Meta, Apple, Pfizer and Intel). According to a report from Economics for Inclusive Prosperity, an estimated 40 per cent of multinational profits are shifted to tax havens around the world each year, with the US estimated to lose about 15 per cent of its corporate income tax revenue in the process. America wants this money back.
In a world of free trade and low tariffs, these figures are a positive result for globalisation, but when seen from a Maga campaign perspective it’s completely different. Trump claims American workers have been hijacked by a business elite that has sent American money and jobs overseas, and countries such as Ireland look less like friends and more like accessories to a heist.
It is clear that Trump wants to take us into a world of trade wars, tariffs and recrimination against US companies that deploy investment abroad. As he said himself on the campaign trail: “If you don’t make your product here [in the US], then you will have to pay a tariff, a very substantial tariff, when you send your product into the United States.” It couldn’t be clearer. His solution to America’s ills is to bring jobs back to the heartland by using a mix of tariffs and tax incentives aimed at discouraging offshoring and making it more attractive for companies to produce goods in the US.
If you are an American patriot these are attractive ideas; they resonate with working people and help explain why not just the white working class but, unprecedentedly, some of the black working class, aim to vote Republican.
If you are sitting in Dublin, a Trump victory would constitute a seismic shift in our overall international strategy. The shillelagh and shamrock diplomacy of the Clinton/Bush/Obama/Biden years is over. It is not good enough being liked if your friends have been evicted from power. In their place will come a group who are not only ambivalent to Ireland but probably antagonistic. These people regard Irish exceptionalism, whether in terms of tax avoidance or freeriding on Nato (something we care little about but is central to their list of grievances), as gaming the system.
If Trump wins, we might find that being great craic and easy to like doesn’t cut muster. With fewer friends in Brussels, where does Ireland turn?
The US election weekend will be on the 35th anniversary of the fall of the Berlin Wall. Maybe historians will look back on those three decades and conclude they were Ireland’s golden years.