US election rhetoric may not materialise into policy - Burke

Minister for Enterprise, Peter Burke, believes that the reelection of Donald Trump as President of the United States will not be as damaging for the Irish economy as some commentators are predicting.

Speaking after Trump's re-election, Minister Burke noted that while the businessman-turned-politician has stated during his campaign that he will impose tariffs on goods imported from the EU and reduce the US corporation tax rate to 15 per cent (the same as Ireland's), it remains to be seen what actions he will take once sworn into office on January 20.

“A lot of the rhetoric we've heard during the US campaign, as we've seen in the past, doesn't always materialise into policy,” Burke said.

“It will be interesting to see which of his viewpoints are translated into policy once his advisors and team are appointed. At the moment, it looks like President Trump will control both houses, which will give him a strong hand in pushing his policies and initiatives through. That will be very interesting, but it’s worth pointing out that the relationship between Europe and the US has been under scrutiny for quite some time. We saw this with the Inflation Reduction Act under the Biden administration, which promoted buying local products and had a protectionist economic approach at its core.

“This trend followed on from Trump’s first administration, so it will be interesting to see how multilateral institutions, like the World Trade Organisation, hold up under this new administration. Many appeal judges haven’t been appointed, leading to a stalemate in the adjudication of cases, and that’s a significant problem."

Acknowledging that "the multilateral system is under greater pressure than ever before", Minister Burke says "we must do our best to work through these challenges".

"I believe the Trade and Technology Council, established under the Biden administration, provides a forum to de-escalate tensions and resolve trade issues. The last thing we want is a tit-for-tat escalation between the US and the EU, as both regions share a hugely important relationship. More discourse and cooperation are needed to resolve issues and promote investment in areas of mutual interest," Deputy Burke added.

Regarding corporation tax, Deputy Burke highlighted that in 2021, OECD member countries agreed to a minimum effective rate of 15 per cent for large multinationals.

“The US hasn’t moved to legislate for this yet, and it's currently stuck in Congress. But from my experience travelling in the US, it’s clear that businesses choose Ireland not just for our corporation tax rate, but for our talent pool.

“Our most prized resource is our people. When we look at the metrics, 8 per cent of our graduates are in the ICT sector—double the EU average. We also have the highest per capita rate of STEM graduates aged 20 to 29 in the EU, which contributes to the vast talent pool available here.

“Beyond tax, Ireland also offers regulatory certainty and significant investment in infrastructure. We’ve built a strong digital economy, a thriving life sciences sector, and a vibrant fintech industry. Many large companies want to establish a critical mass and collaborate in hubs, which further drives investment. So, it’s important to recognise that we have much more to offer beyond just tax benefits.”