President Donald Trump rocked the US political establishment this week by winning another term in the White House, making his election one of the greatest American political comebacks.
On this side of the Atlantic, Irish Government ministers, officials and diplomats are weighing up what will flow for Ireland from the election of the businessman-turned-anti-establishment politician intent on a protectionist economic agenda and what many expect will be an isolationist and highly disruptive foreign policy for America’s allies.
Government and diplomatic relations
Building relationships the first priority
Irish concerns about the forthcoming Trump presidency revolve around the areas of trade, tax and security. Some aspects of these areas will not be amenable to politics and diplomacy, but some will.
The political and diplomatic challenge – as ever – will be to cultivate as close a relationship as possible with the incoming administration in order to advance Irish interests – but without jeopardising existing relationships within the EU or compromising Irish foreign policy principles.
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According to former Irish ambassador to the US Dan Mulhall, who was in Washington during the last Trump presidency, establishing relationships with the Trump team will be an immediate priority.
“Every EU country has the same challenge – how to relate to Trump and his team,” he said.
“It will be a while before we know who the key personnel are. There’s a saying in Washington: personnel is policy.”
He said Trump’s new chief of staff – Susie Wiles, his campaign manager, who was named on Thursday – will “set the tone”. She is the first woman to hold the highly influential role at the centre of the White House.
In Trump’s first administration there was a significant cohort of Irish Americans around Trump, several of whom smoothed the way for communication between Dublin and the White House. It’s not yet clear if that card will be playable again.
But some Irish-American names are in the mix. According to Ted Smyth, a former Irish diplomat who went on to work in corporate America and is plugged into Irish-American political networks, the names touted for the inner circle around Trump include Robert O’Brien and Senator Bill Hagerty who are both being mentioned as possible secretary of state or national security advisor.
I take the view that this is a very challenging moment for Ireland and the EU. But we shouldn’t work ourselves into a fit of despair. We’ll find a way to cope
— Dan Mulhall
“Others are Bob Lighthizer, Trump’s trade adviser last time, who has an Irish background and may become secretary of the Treasury, and former defence secretary Mike Pompeo who may again be secretary of defence,” he said.
One former diplomat said the St Patrick’s Day festivities in the White House and on Capitol Hill will be a key priority for the Irish embassy and its formidable ambassador, Geraldine Byrne-Nason.
There is some optimism in Irish-American political circles. One person who attended St Patrick’s Day events in 2019-20 said: “I saw Trump in action on three St Patrick’s Days. He appeared to enjoy himself. Okay, he’s not Biden, but he did a pretty good version of a normal US president.”
“Trump has a certain regard for Ireland,” said Mulhall. “He has the connection with Doonbeg – that’s a very positive thing,” a reference to the Trump-owned golf resort in Co Clare.
[ Trade, tax and security: what Donald Trump’s victory means for IrelandOpens in new window ]
“I take the view that this is a very challenging moment for Ireland and the EU. But we shouldn’t work ourselves into a fit of despair. We’ll find a way to cope,” he said.
“The embassy always works actively across the aisle, on the Hill and with the business world where political affiliation matters,” said Smyth.
But cosying up to the Trump administration is not without political dangers at home, especially if the US under the new president pursues policies which are unpopular and damaging to the EU’s – and, in turn, Ireland’s interests.
It is generally reckoned that both Enda Kenny and Leo Varadkar, the former taoisigh, pulled off a reasonably successful balancing act. It won’t get any easier for the next taoiseach.
– Pat Leahy
Trade, tariffs and economy
‘Reshoring’ US investment would leave Ireland exposed
Donald Trump’s economic programme has injected new uncertainty into the Irish economic outlook, though a key issue is that nobody knows which of his policies he is actually going to implement.
Irish Government Ministers have already been warned about the potential impact of Trump’s tax and trade policies, which could hit investment, jobs and corporate tax receipts. His stated goal is to bring US investment back to United States – to “reshore”, in the jargon – and as the location for the international headquarters of many big US companies, Ireland is clearly exposed if this happens.
There are a few things to balance up when considering the impact of a second Trump administration, according to Martin Shanahan, head of industry at Grant Thornton and former chief executive of IDA Ireland, the body responsible for attracting investment here.
The markets are betting on a strong US economy after the election, he said, and “other things being equal, this has a positive impact on Ireland – the nuance is that other things are rarely equal”.
Trump’s recipe for driving economic growth revolves around “a type of economic nationalism or protectionist approach” based on trade policy, tax policy and subsidies, said Shanahan.
“A protectionist trade policy approach could result in two main outcomes for Ireland – increased trade tension globally, reducing trade and foreign direct investment flows, that would impact negatively on Ireland as an open trading economy. The second would be the potential for direct tariffs against Europe, again not a good outcome for Ireland,” he said.
If Trump imposes tariffs on imports from Europe, the likelihood is that the EU and other countries would react, potentially leading to trade wars.
[ A Trump win is bad news for the Irish economy. The question is how bad?Opens in new window ]
Trump’s re-election brings “considerable uncertainty” to the economic outlook, in the view of Kieran McQuinn, research professor at the Economic and Social Research Institute, with significant potential implications for the public finances. Corporation tax now accounts for 25 per cent of total tax revenue, he pointed out, and Trump’s policies, if implemented, pose a threat to the traded sector of the economy, jobs and these revenues. A study undertaken by the Danish Industry Federation using a model developed by Oxford Economics estimated that 30,000 jobs in Ireland could be at risk on a worst-case scenario.
So, the big questions is what Trump will actually do and how he will balance the risks to the US economy from tariffs – including higher prices – with meeting his campaign promises. Taoiseach Simon Harris has speculated that Trump’s approach to tariffs will be “transactional” – in other words, he will use them, or the threat of them, to try to secure an economic advantage, rather than as long-term policies.
Ireland has also long benefited from tax-driven investment here from the US and Trump’s promises to cut the US corporate tax rate and introduce measures to make it more profitable for firms to invest at home – rather than in countries like Ireland – will also be closely watched.
The danger lies in the potential longer-term impact on inward investment, which is already under some pressure due to Ireland’s infrastructural shortfalls, or firms changing their international structures in a way that cuts tax revenues paid to the Irish State and boosts their payments in the US.
It is too early to say what tax changes might be on the way, said Shanahan, with the “devil in the detail” for Ireland.
Both Shanahan of Grant Thornton and McQuinn of the ESRI pointed to the strong inward investment here due to how the first Trump tax reform programme played out. Tax experts warn, however, that this time around there may be a sharper focus on bringing investment back to the US. A barrier to Trump in terms of cutting US corporate tax may be the cost, at a time when he will already want to pay for the renewal of other tax reductions introduced during this first term.
After strong growth in recent years, including some major “generational” investments by US firms in Ireland, Shanahan believes investment decisions by big firms are now likely to slow down “as companies weigh up their options and delay to see what election promises translate into action.”
The most important thing now for Ireland, he said, is to focus on our own competitiveness.
“As we head into our own election cycle, focusing on what policies and investments are required to keep Ireland competitive will be important,” he said.
For now the Irish public finances remain buoyant with the budget in surplus and money going into two investment funds. This provides some buffer, but there is no doubt that there is now new uncertainty over corporate tax revenues, long identified as an area of risk.
After a period when everything seemed to be going to Ireland’s advantage in terms of investment and corporate tax, a much more mixed and challenging picture for the future is now emerging.
– Cliff Taylor
Immigration
Overstaying Irish may become easy target
During the US election campaign Donald Trump vowed to crack down on illegal immigration if he was returned to the White House, with his running mate JD Vance suggesting the Republican administration’s plan would see up to one million people deported per year.
The president-elect claims an “invasion” has been allowed to happen under the watch of the Democratic Party with “21 million people” – an unverified number – having arrived over the last three years.
Campaign trail hyperbole aside, the estimated number of illegal immigrants in the US is generally put at about 12 million, with undocumented Irish understood to account for a low five-figure sum within this.
Immigration specialist John Foley, of the Boston-based Foley Law Offices PC, said if he was an undocumented person, he “would not be sleeping well” at present given “draconian changes” have been promised.
He said most undocumented Irish are “visa waiver or Esta (electronic system for travel authorisation, the US visitor visa) overstays” and that people in this category will “most likely be targeted” by the incoming Trump administration.
“The low-hanging fruit, the easiest ones to deport, are the ones who don’t have to go in front of an immigration judge, so those would be the visa waiver overstays and the Irish would be in that community,” he said.
“People have been here for decades and survived under the radar and they put on a good face, but when they get in the office behind a closed door, they clearly express their fears.”
[ Zelenskiy talks to Trump as Biden tries to rush weapons to UkraineOpens in new window ]
Immigration advocates say the approach set out by the Trump campaign would be inhumane, divisive, costly and could devastate families, communities, and sections of the labour market.
In practical terms, an operation at such a scale would require a huge number of Immigration and Customs Enforcement (ICE) staff to be hired, and judges to decide on cases, along with massive facilities to accommodate those facing being put out. But is it all talk?
“I think we’re all in a wait and see,” Foley added, “but the guy [Trump] has always said what he was going to do was focus on immigrants and that he was going to deport more people than at any time in US history, so I take him at his word.”
Another long-rumbling issue is finding a way for Irish people to access the E-3 visa scheme. Announced in 2005 under a US-Australian trade deal, it makes 10,500 visas available annually to skilled Australian nationals, but only around half are taken up.
The idea is that Irish people seeking to enter the US could pick up the slack. Previous attempts to clear a path for E-3 Irish visa garnered strong political support but failed to clear the Senate in 2018 and 2022 after one senator, who offered no clear reason, put a hold on the Bill.
John Deasy, a former Fine Gael TD appointed Irish envoy to the US Congress on immigration during Trump’s first term, said the Republican administration was willing to make “deals” offering clear benefits for Americans. In 2018 these included making it easier for US citizens to retire to Ireland and reducing financial thresholds for Americans seeking Irish visas.
Deasy said the next Irish government should go all in trying to strike a fresh agreement with Trump’s administration as “there’s no reason why there shouldn’t be one to be done again”.
He said the notion of a “four-year diplomatic cycle has become redundant” and Ireland’s interests in this regard would be best served by hiring lobbyists with inside knowledge of the Republican Party in an attempt to clear the remaining hurdles.
– Steven Carroll in Washington, DC
Defence and security
Stance on Nato could force EU’s hand on defence
Trump has signalled he may not support Nato countries he does not see as pulling their weight. He has gone so far as to encourage Russia “do whatever the hell they want” to members that do not meet Nato spending guidelines.
These sentiments have caused alarm across the EU, leading to efforts to “Trump proof” Nato from the incoming president’s whims, including by front-loading military support to Ukraine.
When it comes the impact on European defence, there are two schools of thought on what will happen if Trump tries to gut the alliance.
Some experts believe individual EU members will rush to Washington and do whatever they can to secure bilateral defence agreements with Trump. Others suggest the EU, led by France and Germany, may come into its own and finally put in place a credible defence which does not rely on the might of the US military.
[ What does Trump’s win mean for the EU, Ukraine, China and Middle East?Opens in new window ]
If it can get its act together, the EU may finally achieve its long stated goal of achieving “strategic autonomy”.
“It puts really tough questions front and centre which have to be addressed. Based on everything Trump has said and everything that he tried to do last time, he will pull the rug out from the Nato security guarantee,” said UCD professor of international relations Ben Tonra.
It is possible the EU will step up to the challenge, he said. After all, it did so during the Covid-19 pandemic and during the European debt crisis.
“But this will require a sea change in thinking. It’s a big ask. I don’t know if the EU is capable,” said Tonra.
As a non-Nato member, Ireland would, at first glance, be unaffected by any undermining of the alliance by Trump. But if the result is the EU pursuing its own Nato-style common defence guarantee, Ireland faces potential isolation. A constitutional amendment would be required before Ireland could join any such arrangement.
In this scenario, Ireland and its attachment to neutrality will be the least of the EU’s concerns.
“They might not even bother to ask to us. They’re not going to wait around for us to have a debate and referendum,” said Tonra.
“For Ireland, this is strategically dangerous as we would be sailing away from centre of EU.”
Ed Burke, assistant professor at UCD’s Centre for War Studies, said there would be less patience in the future for Ireland “when it is looking for opt-outs and caveats” on defence.
“There will be increased pressure on Ireland not to act as an obstacle to the EU bolstering its defence either on its own or through Nato,” said Burke.
However, all this catastrophising might be overblown, Dan Mulhall, the former Irish ambassador to Washington, warned.
Europeans will want to develop a good relationship with the new administration and preserve the security arrangements that have been in place for so long. And it is by no means guaranteed that Trump will throw all of this out the window, he said.
“Within the Republican Party there are probably still people who are wedded to the more traditional Atlanticist approach,” said Mulhall.
A lot will depend on who Trump appoints to key positions such as secretary of defence and national security adviser, he added.
“Those are the positions that really count for the type of issues we’re talking about,” he said.
Another concern for Ireland is that Trump’s victory may embolden Russian president Vladimir Putin to step up its campaign of low-level hybrid warfare against the EU. Just this week, western officials accused Moscow of attempting to plant incendiary devices on European cargo aircraft as part of a suspected sabotage campaign.
Ireland has had a taste of these hybrid measures before, in the form the planned Russian naval exercises off the west coast and, in an indirect way, the 2021 cyberattack on the HSE by a criminal gang believed to be operating from Russia.
“Russia will be interested in testing Nato and EU resolve,” said Burke. “We’ll see more of this. I think they will feel more emboldened to interfere in EU elections.”
– Conor Gallagher
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