Irish goods exports to US surge by 34%

Data from the Central Statistics Office (CSO) in Ireland reveals a significant surge in Irish goods exports to the United States in 2024, climbing by 34% to reach €72.6 billion (£60.4 billion), while imports from the US saw a slight decrease to €22.5 billion (£18.7 billion). This resulted in a goods trade surplus for Ireland with the US of just over €50 billion (£41.6 billion).

This trade pattern has gained political significance since Donald Trump's return to the US presidency. Trump believes that countries with large trade surpluses are taking advantage of the United States. Last week, he launched his "fair and reciprocal" trade plan, which could pave the way for high tariffs or import taxes on goods from many countries. Trump mentioned Canada, Taiwan, and India, and described the EU as "absolutely brutal" on trade.

So far, Trump has not indicated that he would try to single out Ireland among the EU countries. The EU's trade policy falls under so-called "exclusive competence," meaning that only the EU can negotiate trade agreements and impose tariffs, not individual member states. This collective approach may offer Ireland some protection from targeted tariffs.

The primary reason for Ireland's trade surplus with the United States is the presence of pharmaceutical manufacturers, who export a large portion of their Irish output to the US. The CSO stated that overall exports of medical and pharmaceutical products increased by €22.4 billion, or 29%, to just under €100 billion (£83.1 billion) in 2024. These products accounted for 45% of all Irish goods exports. A possible factor in the 2024 export growth is the production of Eli Lilly's weight-loss drug Zepbound at its plant in County Cork.

The presence of US pharmaceutical companies in Ireland is partly due to the country's lower corporate tax rate. Brad Setser, a researcher at the Council on Foreign Relations, has been tracking the activities of pharmaceutical companies. In evidence to the US House Ways and Means Committee in 2023, he stated: "There is no plausible explanation unrelated to tax avoidance for the scale of current US imports of pharmaceuticals from Belgium, Ireland, Switzerland, and Singapore." This underscores the financial incentives driving pharmaceutical trade flows.