The US Secretary of Commerce, Howard Lutnick, recently reignited controversy by labeling Ireland as his preferred “tax scam.” This remark was made during an appearance on the business and technology podcast, All-In, where he passionately stated, “We’re going to try and fix a whole bunch of these tax scams. Ireland is my favourite.”
Lutnick went on to express concerns about the significant presence of US multinational corporations in Ireland, particularly in the pharmaceutical and technology sectors. He claimed, “They have all of our IP for 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 [Ireland]. So that’s got to end.” His comments underline a growing frustration regarding the implications of tax arrangements on US industry.
In response, Simon Harris, a Minister in the Irish government, acknowledged the substantial benefits that Ireland has garnered from US investment. He emphasized the importance of the economic relationship between Ireland and the US, stating, “Ireland deeply values its economic partnership with the US and the economic relationship between the EU and the US.”
Harris further elaborated, “It is very much a two-way relationship that has strengthened over each generation, one based on mutual respect that creates significant jobs and investment in both Ireland, the US, and the EU.” His comments reflect an understanding that mutual benefits are at the core of this partnership.
Despite this acknowledgment, Lutnick’s critique points to a prevailing belief that Ireland’s trade surplus with the US is an unfair advantage. He has previously expressed frustration over this, stating on social media, “It’s nonsense that Ireland of all places runs a trade surplus at our expense. We don’t make anything here anymore – even great American cars are made in Mexico.” He argued for a reevaluation of trade dynamics, advocating for a system that he believes would help restore American greatness.
During a recent St. Patrick’s Day meeting at the White House, former President Donald Trump echoed similar sentiments, asserting that he aimed to avoid harming Ireland but insisted on focusing on “fairness” in trade relations. He highlighted the “massive” trade imbalance, suggesting that Ireland “is of course” benefitting at the expense of the US.
Trump further criticized Ireland’s tax strategies that he felt attracted US pharmaceutical companies and commented on the EU’s ruling that mandated Apple to pay billions in back taxes to Ireland. In a statement from the Oval Office, he remarked, “There’s a massive deficit that we have with Ireland and with other countries too, and we want to sort of even that out as nicely as we can, and we’ll work together. But the deficit is massive.”
Looking to the future, a working paper from the Economic and Social Research Institute, along with the Department of Finance, warned that if US tariffs on EU goods were implemented, Ireland’s domestic economy could contract by as much as 2% over five to seven years. The report noted that sectors that rely heavily on exports, such as pharmaceuticals and technology, would likely face disproportionate impacts due to their deep ties to the global economy.
In conclusion, the dialogue surrounding US-Irish trade relations continues to be complex and multifaceted, with stakeholders on both sides calling for clarity, fairness, and respect in their interactions.
Edited By Ali Musa
Axadle Times International – Monitoring
