Adapting to Change: How Ireland's Strategic Strengths can drive business resilience in a shifting U.S. political landscape

Christine Cullen is Managing Director of CRIFVision-net

On Tuesday November 5th, like many of you, I looked on to witness a red wave sweeping the United States culminating in the most stunning political comeback in living memory. ?With Donald Trump back in the White House, alongside a Republican Senate, and a Republican majority in the House, this new era in American politics represents a significant headwind for Ireland, Irish businesses, and multinational corporations based here. However, while Trump’s policies may disrupt global trade and unsettle markets, Ireland is well-positioned to respond proactively. We have shown adaptability and innovation in responding to shocks such as Covid and Brexit in the past and our resilience as a business community will help steer us through whatever comes next.

Corporate Tax Overhaul

The Republicans have proposed a 15% federal corporate tax rate, replacing the 21% flat rate implemented through the Tax Cuts and Jobs Act of 2017. While Democratic opposition could complicate its passage, it is likely that this tax rate will pass in some form.

For Ireland, this proposal represents a conundrum. Our competitive 12.5% corporate tax rate has attracted major US multinationals, but a significant US rate reduction may prompt some companies to rethink their global strategies. While this may appear to be a bleak outlook on the surface, it is important to note that multinational investment is based upon long term economic and workforce forecasts, alongside other factors such as political and geopolitical stability, and any capital flight is unlikely to occur in the short term.

Similarly, our corporate tax rate is not the only factor at play when attracting FDI, and in the weeks and months ahead, the Irish Government will need to emphasise Ireland’s other strategic advantages—such as our skilled workforce, stable regulatory environment, and access to the EU – which have all contributed to Ireland’s appeal as a location to do business. This was echoed in recent comments by Minister for Enterprise Peter Burke, speaking on multinationals based here: “it’s not like you can pull up the anchor and go immediately because they are benefitting from our talent, our skills, our regulatory certainty, our infrastructure from being in this country. I think that is a very significant asset in our corner”.

Tariffs & Trade War

With the Trump Administration poised to pursue a policy of protectionism against China, Trump and the Republicans have proposed tariffs on all foreign goods ranging from 10-20%, a move which would put pressure on the EU and Ireland, threatening to increase costs for Irish exporters and potentially slowing growth.

The potential for retaliatory tariffs between the EU and US also raises the risk of an escalating trade conflict. For Ireland, a major EU-US trade partner, this would add complexity and cost for sectors like tech, pharma, and agri-food exports. Moving forward, there may never have been a better time for Irish companies to build resilience by exploring alternative markets and diversifying their trade partnerships, both as a buffer against protectionist policies and as a strategic opportunity to expand. The global shift in supply chains post-Brexit serves as a reminder of the benefits of having a diversified portfolio of trade relationships.

Position of Strength

For Irish businesses, navigating this new trans-Atlantic political relationship will require adaptability and foresight. Astute financial stewardship will be crucial to navigating the coming months. Recently, our data indicated a number of sectors such as hospitality and construction were struggling due to high input costs. It is vital that the Government introduces targeted measures to support these sectors through any upcoming shock. The hospitality sector can also be reassured that the strong cultural links between the two countries, which drives American tourism here, is unlikely to be damaged anytime soon. The sector can also draw positives from a recent Failte Ireland survey which found recruitment and retention challenges in tourism and hospitality have eased significantly since their 2022 peak, for the third consecutive year.

Likewise, sentiment in certain sectors appears to be largely positive heading into to the new year. In April, Irish mid-sized businesses reported being more confident about their immediate future than their counterparts in the UK, with 73% confident about their growth trajectory into 2025. In this context, the next Irish government’s focus should be measures aimed at supporting this positive momentum, combined with prudent financial policies like the establishment of a sovereign wealth fund, which will further strengthen Ireland’s position as a reliable, innovative, and resilient business hub.

In an unpredictable world, Ireland’s continued commitment to pro-business policies, stability, strategic growth, and global engagement positions us as a resilient and dynamic hub for business. By leveraging our unique strengths and maintaining a forward looking approach Ireland is well-equipped to navigate ?the demands of a changing global economy, ensuring continued prosperity and growth for our home grown enterprises and multinational companies alike.