DUBLIN (Reuters) – Ireland’s foreign direct investment agency is hopeful that the impact of threatened U.S. tariffs on the country’s large pharmaceutical sector will be limited by a U.S. desire to protect consumers and by EU solidarity, its CEO said.
A cluster of U.S.-owned foreign multinationals, mainly in the technology and pharmaceutical sectors, employs about 11% of Irish workers and the government is hugely reliant on the corporate tax they pay.
Trump on Tuesday said he intends to impose auto tariffs “in the neighborhood of 25%” and similar duties on semiconductors and pharmaceutical imports.
He did not provide a date for announcing those duties and said he wanted to provide some time for drug and chip makers to set up U.S. factories.
“I don’t believe we’re facing the end of the world,” though any tariffs would obviously cause disruption and inflation, IDA Ireland Chief Executive Michael Lohan told journalists on Wednesday.
“You can’t replicate regulated industries such as pharma … overnight.”
The world’s 10 largest drugmakers, including U.S. giants Johnson & Johnson, Pfizer and Merck, all have large plants in Ireland, which is also a major exporter of medical devices.
That drove a record Irish goods trade surplus with the United States reached of 50 billion euros ($52 billion) in 2024.
But just 16% of Irish pharmaceutical exports are finished products, meaning any tariffs would hike the cost of finished products for U.S. consumers and be counterproductive for the administration, Lohan said.
“Ultimately no administration wants to damage its own economy,” he said.
Around 75% of Ireland’s multinational produced goods are exported to international markets outside of North America and thus not subject to U.S. import tariffs, Lohan added.
The IDA is also hopeful that the European Union, which is responsible for Irish trade negotiations will use its clout to protect Ireland as it did in the wake of Britain’s exit from the European Union.
(Writing by Conor Humphries; Editing by Toby Chopra)
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