Trump Tariffs Could Prove A Bitter Pill To Swallow For Irish Real Estate

U.S. President Donald Trump’s distinct lack of misty-eyed sentiment for the old country has left key Irish real estate markets, including life sciences, industrial and offices, awaiting the impact of threatened tariffs.

As the 2 April date when tariffs are due to be implemented approaches, companies have raced to get goods, particularly pharmaceuticals, into the U.S. The value of Ireland's U.S. exports in January surged to almost €12B, up more than 80% compared with the same month in 2024.

One likely factor is that Eli Lilly manufactures weight loss drug Zepbound in Cork — and Trump told the media during a meeting earlier in March with Taoiseach Micheál Martin that the trade imbalance was “massive” and described Ireland as “having the entire U.S. pharmaceutical industry in its grasp.”

In less than two weeks, barring a Trump delay, that trade surge will end and the reality will bite. That would undoubtedly affect the Irish economy, and hence its commercial real estate sector — life science and logistics in particular — while the market was anticipating a recovery. 

“From an Irish perspective, the state’s biggest exposure is likely the pharmaceutical sector,” Grant Thornton partner Martin Shanahan said in an impact report.

“Reports from February suggest that pharmaceutical industry leaders were privately warned of impending tariffs and encouraged to move manufacturing to the U.S. Given Ireland’s role as a global pharmaceutical hub, any policy shift in this direction could have profound effects on supply chains, investment, and job creation.”

Last year, Ireland's exports of goods to the U.S. were worth €72.6B, while its imports from the U.S. were valued at €22.5B, representing a trade surplus of just over €50B, according to Ireland's Central Statistics Office. 

That puts Ireland in fourth place — behind only China, Mexico and Vietnam — among countries with which the U.S. has a trade deficit, overtaking Germany and Japan, Shanahan pointed out.

Fresh figures from the Economic and Social Research Institute estimate that tariffs could cost Ireland more than €18B in lost trade if the U.S. imposed 25% tariffs on all EU exports. With reciprocal tariffs of its own, Irish GDP would be 3.7% lower over the next five to seven years compared with a no-tariffs scenario.

The imposition of 10% tariffs by the U.S. on imports from the rest of the world that are met with retaliatory tariffs could potentially cause Irish GDP and modified domestic demand — a measure of the domestic economy that removes the distortionary impact of multinationals — to fall by as much as 3.2% and 1.7%, respectively. For 25% tariffs, GDP and MDD would fall by 3.7% and 1.8%.

The study was co-authored and funded by the Department of Finance and warned that protectionist policies would have a “disproportionate impact” on the traded sector in Ireland.

“This, in turn, would lead to a significant impact on the labour market, consumption and the domestic economy as a whole,” report author Paul Egan said in a statement. “Protectionist policies may also prompt multinationals to relocate to the U.S., posing further risks to the Irish economy and public finances.”

Ireland first became attractive for international companies as far back as the 1950s, and the world’s first free trade zone was established near Shannon Airport in 1959. Dell and Pfizer were among the early arrivals, and membership of the European Economic Community and then EU allowed tariff-free access to the European market. Low corporation tax rates of 12.5% helped lure U.S. companies and in part spurred the Celtic Tiger economy of the 2000s.

For now, there is a sense that it is too early to have much certainty over what impact tariffs might have on the economy and therefore the consequential impact on real estate. However, some investors believe the longstanding ties between the U.S. and Ireland will shield the country from the worst of fiscal trade barriers.

“U.S. businesses thrive in Ireland, driving demand for high-quality commercial space,” Fine Grain Property CEO Colin MacDonald said. “We continue to see strong interest from international firms seeking access to European talent and markets, reinforcing Ireland’s role as a key player in global business networks.

“The Ireland-U.S. economic relationship is a two-way street. Irish firms have invested over $240B in the U.S., creating nearly 100,000 jobs — proving this is not just about exports but shared prosperity. Trade tensions come and go, but that mutual success story is here to stay.”

The most obvious immediate impact is likely to be on the industrial and logistics sector for facilities dedicated to U.S. imports and exports. With constrained supply in Ireland, this may well be a sector that can absorb fluctuations at least in the short term.

“Overall, the industrial and logistics market has achieved stabilisation, and we expect the occupier market to strengthen this year, but obviously right now is very early to assess the likely impact of tariffs [across Europe] and whether they are short-term or long-term,” BNP Paribas Real Estate Pan-European Logistics and Industrial Leader Craig Maguire said. “However, clearly the issue is bigger for markets with high exposure to the U.S.”

He added that the nearshoring that took place following supply chain disruptions could become a greater factor, while companies may also choose to store more to mitigate against potential issues.

In the meantime, the fact that American corporations from Amazon to Alphabet, Meta to Microsoft and many Big Pharma companies have major European facilities in Ireland and are paying substantial taxes in the country has not gone unnoticed by the new occupant of the White House.