Trump Tariffs Could Cut Irish GDP by 4%, Employment by 3%

A government analysis by the Department of Enterprise, Trade and Employment warns that Donald Trump’s proposed tariffs could significantly harm the Irish economy. The unpublished research models various scenarios, including unilateral tariffs and wider trade wars, all predicting «significant negative implications.»

Over the medium term, GDP is projected to fall by 2.75% to 4%, and employment by 2.5% to 3.25%. Domestic demand could drop by 1.75% to 2.5%, with price levels increasing by 2% to 3%. The analysis notes these models might underestimate the actual impact as they do not fully account for indirect channels or broader measures like changes to the US tax code encouraging investment reshoring.

Ireland is particularly vulnerable due to its reliance on corporation tax and high exposure to US trade. The impact on total trade flows with the US is approximately three times greater for Ireland than for the overall EU. Between 110,000 and 160,000 Irish workers (3.9% to 5.7% of total employment, or 12% to 14% including services) are in sectors highly exposed to US trade, such as pharma, tobacco, and ICT. US firms in Ireland employed 178,000 people in 2023, with payroll costs of €16.1 billion in 2022.