Donald Trump's win could spell disaster for Ireland - here's why
Not only could Irish people living in the US be faced with deportation orders, but some of the president-elect’s policies could destroy Ireland’s economy.
People across the globe shed tears yesterday as Donald Trump’s America will likely gut abortion access for women and enact mass deportations for immigrants. While Irish residents may pity our friends stateside from afar, Trump’s return to the White House could have a detrimental effect on Ireland.
Not only could Irish people living in the US be faced with deportation orders, but some of the president-elect’s policies could destroy Ireland’s economy. Trump has pledged to lower the US corporate tax rate from 21% to 15%. This would put it in direct competition with our 15% for corporations, diminishing Ireland’s appeal as a tax-efficient location for American multinationals.
Managing Director at Sia Partners John Melarkey said that if this 15% rate comes into effect stateside, it would likely reduce corporate tax receipts in Ireland. He added: “As US corporations find more incentives to stay domestic or bring operations back to the US, Ireland is seeing a potential dip in foreign direct investment (FDI).”
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Trump also has a strong protectionist agenda, which will deter new US companies from setting up ships overseas. Mr Melarkey said: “For Irish exporters, Trump's protectionist policies will introduce new trade hurdles, with increases in tariffs and other barriers raising export costs to the US and straining Ireland's competitiveness. Trump’s second term ultimately presents more restrictive policies that Irish businesses are closely monitoring.”
For years, the Department of Finance has raised concerns that the Government is too reliant on corporation tax receipts, especially from US companies. In the first 10 months of this year, the Government collected €76.3bn in tax, 36% of which was from corporations.
Close to half of all corporate tax comes from just three big US companies. The employees of these companies also pay a significant amount of income tax. However, Foreign Affairs Minister and Tánaiste Minister Micheál Martin doesn’t seem too concerned about Trump's vow to reduce corporation tax to 15%.
Speaking to reporters yesterday he said Trump “is not the first president-elect who has said they will endeavour to bring back American companies to the US”.
The Tánaiste said many US companies need a European headquarter, and Ireland has been an effective base for many pharmaceutical, biopharma, medical device and technology and financial companies. This country also serves as their entry point to the EU. Economists hope that even if Trump does reduce the corporation tax, companies such as Apple and Google have spent years investing in Ireland and building their workforces here.
However, the Tánaiste said there has been a worrying shift towards protectionism in US politics over the last 15 years, and with the election of Trump “there is a journey ahead here”. He added: “It remains to be seen how it all transpires. I think what's key for Ireland is we are an open trading economy. We depend on fair and free trade. Any move towards protectionism would not be good for Ireland.”
Trump’s victory could also be detrimental to the undocumented Irish living stateside. Immigration lawyer Fiona McEntee said the 15,000 undocumented Irish immigrants living in the US would be a “priority for deportation” under Trump’s America.
The president-elect has vowed to enact the biggest domestic deportation in US history during this term. He made similar promises during the last election cycle while in office, but deportations never superseded 350,000. In 2013, then-president Barack Obama carried out 432,000 deportations, the highest annual total since records were kept.
While visiting New York last month, Taoiseach Simon Harris reassured undocumented people living in the US that they should not fear strict immigration policies brought in by the next US president. The Taoiseach vowed to formalise the status of undocumented Irish people and said he believes a special case should be made for undocumented Irish immigrants in the US.
Speaking at Leinster House on Wednesday evening, Enterprise Minister Peter Burke said that he has no concerns in the “immediate term” for people in Ireland employed by American companies.
“It's very difficult to know what trajectory cooperation tax would take,” he told reporters. “But I would point out, outside of cooperation tax, there are huge other areas, like skills, the talent we have here, the youngest population in the EU, like how competitive it can be. We're the most competitive economy in the Eurozone.”
He continued: “We have to see what was spoken about in the campaign, how that plays out over the next number of weeks and months ahead. When, obviously, the incoming President sits down with his advisers, appoints a new cabinet, that's when the meat on the bones of what has been discussed and the narrative that has played out during the campaign will be to the forefront. Our view is that we do not want to see any tariffs take hold.”
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