As Donald Trump fights to maintain his immigration order, Taoiseach Enda Kenny has faced mixed reactions regarding his upcoming St Patrick’s Day meeting with the US President. Louise Carroll explains the economic importance behind the tradition.
Trump’s controversial ban on migrants from seven Muslim countries is so far being portrayed as an act of prejudice by many democratic governments and activists. However, it is crucial that we maintain the distinction between what is business and what is personal.
Being the corporate-loving tax haven that we are, Ireland is home to over 700 US multinational companies who employ around 130,000 people. They contribute to the best paying section of our economy and pay approximately €2 billion in corporation tax per year while greatly contributing to Ireland’s net exports.
A taxing issue
At a meeting with business leaders in the White House on January 23rd, Trump said he plans to “cut taxes massively” for corporations and claimed his administration is aiming for “anywhere between 15% and 20% corporation tax”.
This large-scale reduction would usually take a number of years to get to the proposed measure. Nevertheless, matters seem to be moving quickly with Republicans holding the majority in both the senate and congress.
“The stated tax and trade positions of Donald Trump could have a significant impact on our small open economy if carried through—tax will become less of a deciding factor for US multinationals when deciding on optimum locations. The potential impacts of these policies should now act as a catalyst to take a fresh look at Ireland’s market position and FDI strategy to ensure they will continue to work well for us in the changed US political landscape.” Deloitte managing partner Brendan Jennings said.
The outcome is likely to mean that future US corporations may benefit from remaining in the United States but Ireland’s US multinationals have invested heavily here and would not be quick to return home, or so we hope.
The Americans are coming
In 2015, US visitors accounted for 25% of the total spend made by overseas vacationers. These US visitors brought €1.1 billion euro to the Irish economy.
Last year was record breaking with North American visitors contributing revenue of €1.4 billion to the Irish economy and helping to maintain 230,000 jobs in the sector.
Tourism Ireland has already begun its New York marketing campaign for 2017 to promote Ireland which they refer to as “a market which offers strong return on investment in terms of holiday visitors and expenditure.”
Tourism Ireland’s head for North America, Alison Metcalfe, said, “We have a very clear focus of the year ahead and that is to deliver a plus 6% increase in visitor numbers and plus 9% increase in revenue from North America.”
If this is to happen, it would appear wise to preserve our diplomatic relations with the United States despite its President’s often chauvinistic remarks and political methods.
More than just a bowl of Shamrock
The St Patrick’s Day tradition — which is said to have began with Irish Ambassador to the US, John Joseph Hearne and President Truman — has manifested into much more than simply handing over shamrock.
Enda Kenny has made clear he is not in favour of the proposed travel ban and has said he “will obviously say that to the President and Vice President when [he] meets them.”
The petition named ‘Shamrock for Trump: Not in My Name,” has gathered over 38,000 signatures so far, clearly demonstrating the anger towards the president.
Although it’s very clear to see why so much angst and fury now surrounds the name Trump, these are uncertain times economically and commercially for Ireland.
Brexit means the UK will likely be gone from the EU in two years’ time and we need to create new and innovative trade agreements with our biggest current trading partner.
Without our biggest ally in the EU and the likes of France and Germany desperately trying to increase our corporation tax, we need to be savvy and recognise the opportunities we have as a bridge into the EU market for the likes of Britain and the US.
The work of US-based companies in Ireland is mainly geared towards exports and largely those that make their way into the EU market through our gateway there.
The benefits Ireland and the US gain from one another are vast and it is essential we maintain a strong relationship.
By all means, Enda Kenny and others should state their opinions and oppose the travel ban, but this does not mean we should even contemplate burning any bridges.
Ireland has much to gain at present but equally as much to lose. It is crucial that we seize any opportunities within our grasp and if that means being buddies with ‘the Donald,’ then so be it.