Taoiseach Micheál Martin had his speaking points: investment is two-way street; Ryanair buys a lot of Boeing aircraft; Ireland “has served US companies well”.
But the stats don’t lie. Ireland has been taker, not a giver, in the great game of globalised trade which US President Donald Trump now sees as a one-way street against his country.
For the most part, Martin sat in silence as his US counterpart railed against the usual scapegoats: Joe Biden, the European Union, the “deep state”.
Last week’s Oval Office meeting between the two leaders had been billed as potentially problematic for Ireland. Dublin and Washington are deeply divergent on key issues like Gaza and trade. Either could have lit a fuse.
And the sight of Ukranian president Volodymyr Zelenskiy being mauled by Trump and vice-president JD Vance a week earlier must have spooked Irish officials.
When Ireland’s oversized trade surplus with the US (€50 billion and counting) came up; when Trump talked about Ireland taking “our pharmaceutical companies away” and the US’s “massive” deficit” with Ireland, Martin stared at a point on the wall, a picture of disassociation.
One of the first things Trump did upon taking office was to sign<a href="https://www.irishtimes.com/world/us/2025/01/21/trump-signs-executive-order-pardoning-january-6th-capitol-rioters/"> </a>an executive order withdrawing US support for the OECD’s deal on tax which had ushered in a minimum rate of 15 per cent
This is how official Ireland has traditionally dealt with the thorny issue of tax.
Minister for Finance Pascal Donohoe briefly broke cover before Ireland signed up to the Organisation for Economic Co-operation and Development (OECD) deal on tax brokered in 2021 when he argued that smaller countries should be able to use tax competition as a lever to compensate for the natural advantages enjoyed by big countries.
Otherwise the State has maintained a poker face as the revenue from Big Pharma and Big Tech rolled in.
In the US legal system, it would be called “pleading the fifth”. Prosecuting lawyers can’t assume a defendant’s guilt from his or her silence but in the big bad world of tax they can and do.
The slur of tax haven meted out to Ireland in countless reports and accusations has stuck. Diplomats say media coverage about Ireland across Europe is more than often about tax and typically paints the State in a negative light.
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Ireland hasn’t shaken off the Cayman Islands smear and the €14 billion Apple tax money has only reinforced the perception that we’re eating everyone else’s lunch.
This narrative entirely obscures the US tax system’s own involvement in multinational tax avoidance and eschews any serious examination of why the likes of Apple, Google and Pfizer were allowed, some might say encouraged, to offshore their operations (even the ones that supply the domestic US market) and keep billions in profit away from the US taxman.
It’s easier to paint Ireland as the villain and the US as the victim. Ireland isn’t going to question this account of things for obvious reasons. You don’t bite the hand that feeds.
There’s no disputing these companies have successfully exploited anomalies in the Irish tax system (you could be registered here but tax resident somewhere else, a hangover from the British system we inherited) but they were facilitated first by lax licensing laws in the US.
US companies bestride the world and make their shareholders - a powerful lobby in Washington- super rich.
These rules allowed Apple’s main offshore subsidiary to be effectively stateless when it came to paying tax. And if Ireland is such a tax haven, why aren’t German, French, Japanese companies setting up similar structures here. The answer is simple: their domestic tax systems wouldn’t allow it.
Whether Washington actively connives in this or merely turns a blind eye is a question that rarely gets aired. US companies bestride the world and make their shareholders – a powerful lobby in Washington- super rich.
This is where Trump’s “deep state” conspiracy theories, which posit clandestine collusion between powerful political and financial interests, might have some currency.
The so-called Gilti (global intangible low-taxed income) tax rate – brought in by Trump in 2017 to target income from intellectual property such as copyrights, licences, patents and trademarks – was aimed at tackling this.
It spectacularly backfired, triggering a further offshoring of US assets and another surge in tax receipts for the Irish exchequer.
The Government and the Industrial Development Authority (IDA) have always been more fearful of a big change in the US tax code. Maybe they’ve underestimated how far Trump will take his tariff threats. He has warned that April 2nd (the date the US administration say it will announce reciprocal tariff actions on rival countries) will be a day of reckoning for the European Union (EU).
But his chopping and changing is playing badly with markets. It’s inconceivable that companies would be spurred into making investment decisions on the back of a Trump tariff announcement that could be watered down or forgotten about within days.
Either way Martin has to be very careful not to be seen to be leveraging Ireland’s long-standing ties with Washington in a way that is divergent from the EU’s position.
One of the first things Trump did upon taking office was to sign an executive order withdrawing US support for the OECD’s deal on tax which had ushered in a minimum rate of 15 per cent. Without the US, the deal is effectively defunct.
That will probably place Ireland’s tax regime in the spotlight again when, in reality, it is the US tax system and US companies causing most of the issues.
