The Irish government has warned that the country could lose up to 80,000 jobs if Donald Trump launches a trade war with the EU, and has hit back at accusations by the US that Ireland is operating a “tax scam”.
The jobs estimate represents almost half the workforce in Ireland’s multinational sector, which the US president is expected to target as part of an effort to repatriate jobs and taxes.
In the worst-case scenario, “it is very possible that between 50,000 and 80,000 jobs that would have been created or kept within the economy won’t be”, Ireland’s finance minister, Paschal Donohoe, told RTÉ.
The Irish government also responded to claims by the US commerce secretary, Howard Lutnick, that Ireland was running a “tax scam”.
Ireland’s enterprise minister, Peter Burke, said Lutnick, who had previously described Ireland’s trade in goods surplus with the US as “nonsense”, was wrong.
“We have the most bilateral treaties, tax treaties as part of the EU as well. So we absolutely have no tax scams in this country. We’re very clear in terms of transparency,” he told RTÉ, adding the country had led the Organisation for Economic Co-operation and Development revised tax agreement that increased Ireland’s corporate tax rate from 12.5% to 15%.
Speaking on the All-In podcast, Lutnick was clear Dublin was in his sights. “We have to try and fix a whole bunch of these tax scams. Ireland is my favourite. The country of Ireland last year had a $60bn budget surplus. So [America] lose $2tn and they make $60[bn],” he said, significantly inflating Ireland’s actual surplus.
In 2024, Ireland recorded a €25bn (£21bn) surplus that included the “transformational” Apple back tax windfall of €14bn – the result of a long-running tax battle.
Official government data showed Ireland last year operated a trade deficit with the US of almost €93bn when goods and services were taken into account. It included a trade surplus in goods of about €70bn but a deficit in services amounting to €163bn.
Trump has already said will introduce tariffs against the EU on 2 April, which he has described as “liberation day”.
In a meeting with Ireland’s taoiseach in the Oval Office two weeks ago, he made it clear Ireland was in his sights, singling out the US pharmaceutical companies operating in Ireland that include Pfizer and Eli Lilly.
Experts say tax changes in the US could have more damaging impact on the life sciences sector in Ireland than tariffs, with manufacturers unlikely to close plants that take years of planning to open.
But other sectors that could be hit in collateral damage include alcohol. Trump has threatened a 200% tariff after the EU signalled it would add additional taxes to imports of US whiskey including Jack Daniel’s and bourbon.
Ireland sells about €800m worth of alcohol to the US each year, more than half of which is Irish whiskey such as Jameson, Teeling and Connemara.
Last week a report by Ireland’s Economic and Social Research Institute showed the Irish economy could shrink by up to 3.7% under the worst trade war scenario.
Sinn Féin’s Pearse Doherty told RTÉ that the party would be in favour of Brexit-style sectoral supports for businesses hit by a trade war.
