State Must Invest To Mitigate Trump 2.0 Risks, Goodbody Warns

Irish policy efforts from the newly formed coalition should focus on increasing fiscal buffers by channelling greater resources to sovereign savings funds and maintaining capital spending at 5% of gross national income.

That is necessary to address infrastructure shortages in the wake of the “Trump 2.0” presidency, according to stockbroker Goodbody.

Risks are “skewed to downside” for Ireland from President Donald Trump’s proposed policies, and given its economic exposure to the United States, mooted policy reforms under the second Trump term could have significant implications for Ireland’s prospects and the country's economic model in the coming years, Goodbody Chief Economist Dermot O'Leary warned in a new report.

He said risks included tariffs and corporate tax changes. But there are possible upsides, too, from better U.S. dynamism and increased profitability from U.S. firms based in Ireland.

“Ireland is the 51st state from an investment perspective and Ireland acts as a base for some of the largest U.S. multinationals in the technology and healthcare sectors,” O’Leary said, introducing Goodbody’s report. “Ireland has the largest share of workers employed by U.S. firms in the EU as result.”

This, along with changes to international and domestic tax rules, supportive policies for intellectual property and improving profitability, has resulted in record corporation tax receipts in Ireland.

“Corporate tax changes in the U.S. bring the greatest risks for Ireland in our view. In the absence of reforms, corporate tax receipts in Ireland are expected to grow further. ... Fiscal buffers and capital spending commitments should be priorities,” O’Leary said.

Goodbody also pointed to the fact that a new minister for housing for the recently appointed administration will have the responsibility of addressing obstacles such as planning, land availability and utilities to achieve higher housing supply targets. 

“We expect completions to grow to 40K in 2026, with price growth to continue at a more moderate pace,” Goodbody said in the report.

The Land Development Agency has been behind much of the new housing development and has appointed David Duffy as its senior research economist. Duffy will establish and lead the development of the economics function at the state’s affordable housing delivery body. He previously worked as a director with Property Industry Ireland.