For understandable reasons, Irish Prime Minister Micheál Martin’s visit to the White House on 12 March did not grab as many headlines as the visits of Volodymyr Zelensky or Emmanuel Macron. Instead of colossally high-stakes subject matter like the war in Ukraine or NATO, the Trump administration’s primary target this time round was what US secretary of commerce Howard Lutnick calls Ireland‘s “tax scam”, whereby US multinationals take advantage of Ireland’s low corporate tax rate to avoid paying taxes in America.
“They have all of our IP [intellectual property] for our great tech”, Lutnick told a popular financial podcast in March. “All our great tech companies and great pharma companies, they all put it there because it’s low tax and they don’t pay us. They pay them. So that’s got to end”.
On 1 January 2024, Ireland’s corporate tax rate was increased from its famously welcoming 12.5 to the OECD minimum of 15%, still low enough to attract the multinationals that the Irish economy relies upon (the average European corporate tax rate in 2024 was around 21.3%, according to the Tax Foundation, “slightly below the worldwide average”). As Karla Adam explained in the Washington Post, removing corporate tax receipts would turn Ireland’s Europe-leading 21.9 billion euro budget surplus into a deficit.
Three quarters of that tax revenue come from US multinationals, which the Trump administration intends to reshore. Moreover, as Lisa O’Carroll reports for the Guardian, there are also fears that Ireland would lose up to 80,000 jobs if Donald Trump follows through on his threatened trade war with the European Union.
However, as O’Carroll reports, US multinational profits are much more likely to be “repatriated” than jobs, at least in the short term. “From a manufacturing point of view”, economist Dermot O’Leary told O’Carroll, “it takes a lot more than a four-year presidential term to actually find the land, put the plan in place, get the planning, build the factory, get the skills in place. But what can happen a lot more quickly is in relation to the profits generated and the intellectual property”.
Talking to O’Carroll, political economist Aidan Regan describes Ireland’s precarious system of “profit shifting” and “phantom exports” that could go up in smoke if Trump were to implement domestic tax reforms. While official data suggests that about 50 billion euro of medicines are exported worldwide from Ireland every year, Regan explains that a large proportion of those medicines “never touch Irish soil”, due to “a practice known as ‘profit shifting’, in which companies manufactured drugs partly or entirely outside Ireland, but because the legal ownership or intellectual property was held in Ireland, profits were booked there.” According to Regan, “one could argue that up to half of the corporate tax take in Ireland is volatile and based on, quite frankly, phantom exports”.
Diplomatic sparring
As demonstrated by the clash with the Ukrainian president, democracy, for the Trump administration, is a kind of combat sport. Michael Murphy in Canada‘s conservative National Post, for example, describes Micheál Martin preparing for the encounter “like a boxer heading for a prize fight”. And despite meticulously cataloguing all the points where the Irish PM contradicted previous statements or nodded along as Trump spouted untruths, Murphy’s article concludes that “Ireland’s leader showed the world how to handle President Trump”.
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Talking to Shawn Pogatchnik for Politico Europe, Irish professor of international politics Scott Lucas argues that, when it comes to topics such as Israel-Palestine or Ukraine, “Ireland doesn’t have the luxury of proclaiming its principles at a moment of real danger to its economic security. […] Even arguing points of objective fact would prove unwise for Ireland versus the MAGAverse.”
Speaking of pugilism, Ireland’s other “representative” at the White House for this year’s St Patrick’s Day celebrations was MMA fighter Conor McGregor. This was a “cozy” affair, where McGregor was given free rein to attack his home country’s immigration and asylum “racket”. For Keith Duggan in the Irish Times, it was “enough to curdle many a pint of stout on both sides of the Atlantic”, especially given that the fighter was just recently found guilty of rape in a civil court. “It would be naive”, Duggan writes, “to believe that Trump’s staff did not inform him of the judgment against McGregor in last November’s rape trial in Dublin, during which Nikita Hand gave a harrowing and courageous testimony. For her, for all victims of sexual violence, Monday’s preening must have been beyond distressing”.
This is among the reasons why Conor Fitzgerald, in British conservative magazine The Critic, sees McGregor’s Patrick’s Day visit as emblematic of MAGA’s failure to thrive beyond US borders, and why such “ideological interventions on the part of the administration have been unsuccessful”. As evidenced by Canadian conservative leader Pierre Poilievre‘s dramatic plunge in popularity, or the failure of the “poisonously unpopular” Elon Musk‘s intervention on behalf of the AfD in Germany, “more Trumpist energy, or more involvement by Trump and co., is probably not going to promote the move towards normalisation that populist movements globally need. They are already pushing up against the limits of what shock and controversy can do for you”.
“Drill, baby, drill”
If such interventions do no favours for the image of the populist right in Ireland and abroad, “Trump and co.” do seem to be pushing – or allowing – existing governments to shift their energy policies in a potentially devastating direction.
In the background of Martin’s visit was the decision, taken just a few weeks prior, to approve the import of fracked liquefied natural gas (LNG) from the US. As Daniel Murray in the Business Post reported in early March, “the Irish government has abandoned its official opposition to fracked gas imports, paving the way for LNG from the United States – the world’s largest fracked gas producer – to fuel the country’s new 300 million euro state-led LNG terminal.”
Meanwhile, Caroline O’Doherty in The Irish Independent reports that the collapse of Ireland’s Green Party (coalition partners in the previous government) and the increase in independent members of parliament has led to a “swift change in outlook” towards fossil fuels.
Dylan Murphy of Not Here Not Anywhere tells O’Doherty that “this decision opens the floodgates for commercial entities to import a new fossil fuel into Ireland that, according to recent studies, has a carbon footprint 33% worse than coal”. In a separate article, O’Doherty also reports on the efforts of medical professionals and campaigners in the US to discourage Ireland from “importing their suffering”, namely, the environmental harm and human health risks associated with hydraulic fracturing.
From Nova Scotia to Alaska, from Ireland to the Netherlands, geopolitical uncertainties have increased the pressure – and political consent – to “drill, baby, drill”. In Le Grand Continent, Aurélien Saussay warns that, for the European Union, choosing US LNG means definitive renunciation of its 2030 climate targets. “By rushing under the American energy umbrella”, Saussay writes, “Europe is choosing to prolong its dependence on a fossil fuel source that is even less compatible with its climate targets than Russian gas”. Europe faces a “trilemma”: “how to guarantee our energy security without compromising the decarbonisation of our economy or limiting the availability of low-cost energy for Europe’s population and industry”.
The only response, Saussay argues, is the accelerated development of renewables. “For Europe, the only great power without any significant fossil fuel reserve on its territory, energy transition is the cornerstone of its geopolitical transition: not only an imperative for the climate – but above all the key strategy for giving shape to its strategic autonomy”.
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