Why the Irish are worried about President Donald Trump

When Donald Trump becomes the 45th president of the U.S. this Friday, it will be greeted by very mixed reaction in Ireland. There will be almost unanimous disdain from media commentators who will try to outdo each other with expressions of sorrowful horror at what has happened to America.

And there will be polite, formal congratulations from the Irish authorities, who in private are deeply fearful about what The Donald may do when he gets into the Oval Office.

It will be particularly interesting to hear what our Castro-admiring president, Michael D. Higgins, will say, since Trump embodies everything he despises. Higgins sent a message of warm congrats to President Obama on his re-election in 2012, offering him “the continued goodwill and best wishes of the people of Ireland.”

Will he do the same for The Donald? Will he choke in the process?

The GOP is excited about Trump, but worried about what he'll say next https://t.co/1I5KCRUs0c pic.twitter.com/UHSkFvkt5A
— CNN (@CNN) January 18, 2017

The reaction in many countries around the world will be similarly torn, one imagines. The fear and loathing Trump has generated is both extraordinary and universal (apart from Russia, of course!) so there will be lots of best wishes being delivered through gritted teeth in the next few days.

But if any country in the world has good reason to be fearful, it is Ireland. We have more to lose than almost anyone else if Trump carries through on some of the promises he made during the campaign, and even some of the things he has said since he won the election.

Last week, for example, he was having a go at the big American pharmaceutical companies, comments which wiped billions off their stocks in hours. He said he wanted to create "new bidding procedures for the drug industry because they're getting away with murder." And he is right.

Ordinary Americans pay some of the highest prices in the world for drugs. So does the American government when it buys the huge quantities of drugs it needs for its health care programs. This is because Big Pharma in the U.S. has lobbied competition out of the system, something the Democrats did little about.

Making this situation even worse is the fact that so many big American pharmaceutical companies have moved their production overseas and then sell their drugs back into the U.S. "Our drug industry has been disastrous. They’re leaving left and right. They supply our drugs, but they don't make them here," Trump said.

Like his warnings for U.S. car makers who moved production to Mexico, he made it clear there will be consequences for U.S. pharma companies that have their manufacturing abroad. Between that and his promise to save Americans "billions" on drugs by introducing competitive bidding for supply contracts, there seems no doubt there are tougher times ahead for the big American pharmaceutical companies.

And where do you think many of these American pharma companies went when they shifted jobs out of the U.S.? Little old Ireland, of course, home of low taxes and the world's Viagra (and many other drugs)!

We have been phenomenally successful in attracting the big U.S. pharmaceutical and medical device companies here to set up manufacturing plants and research facilities. More than 50,000 people in Ireland are employed in these sectors, mostly by the big U.S. companies here.

Of course the pharma sector is just part of the wider threat that Trump poses to jobs in Ireland. All of the big U.S. high tech companies are in Ireland as well, like Apple, Google, Facebook, LinkedIn and so on, employing tens of thousands of people here. Thanks to the EU case involving Apple we now suspect that instead of paying our headline 12.5 percent corporation tax rate, a lot of them probably have deals here that reduce their effective tax rate to not much more than two percent.

Even if two percent seems small, when you are talking two percent of the billions in profits these huge multi-national companies make it adds up to a very significant sum for a country as small as Ireland. The most recent figures show that two-thirds of the roughly €7 billion we collected in corporation tax in Ireland in 2015 came from the top 10 companies here -- nearly of all of them big American multinationals.

Enda & Noonan doff'ed the cap and rolled out the Red Carpet...
Look at what Trump thinks of Little Auld Ireland now.#ScarlettForYourMa pic.twitter.com/iFE2LpJkfx

— Jim Sheridan (@Jim_Sheridan) January 15, 2017

One of Trump's headline promises was jobs, to bring American jobs back to America, to reduce corporation tax rates in the U.S. to encourage companies to return, and to offer a tax break to allow them to bring home the accumulated global profits they now hold overseas. If Trump carries through on this, the effect on Ireland will be serious.

It could result in the amount of corporation tax we collect falling by a third or a half. If it falls by even a quarter that would necessitate either severe tax increases in areas like income tax or, more likely, big cuts in state spending on welfare, health, services and so on which would cause real hardship here, with political consequences.

It's not just the lost tax revenue that would be a problem, of course. Foreign companies now provide one in five of all jobs in the private sector here and most of them are American. If a lot of them leave our unemployment numbers will shoot back up.

We can try to hold on to the U.S. companies that are here, of course, with flattery and new inducements. But in the end, money will talk.

Irish governments have always insisted that there are many reasons why big U.S. companies locate here -- our educated youth, our access to the EU market, our stable, English-speaking society and, yes, our low corporate tax rate. That propaganda line about tax being only a minor part of our appeal is going to be severely put to the test if Trump does even half of what he has promised.

Apart from the likely effect on American multi-nationals based in Ireland, there is also a wider concern here about the negative effect Trump's economic policies could have on world trade. If a Trump presidency is going to tear up international trade agreements, and increase protectionism at home with new tariffs on imports, the inevitable result will be a slowdown in global trade and growth.

For an open economy like Ireland which is heavily dependent on trade that will not be good, even if the eventual outcome is not as dire as some economists are predicting.

Another one of Trump's headline promises that is worrying for us is his undertaking to end illegal immigration into the U.S. -- in particular the collateral damage whatever steps he takes to achieve this may have. The wider ramifications of a crackdown won't be clear until we know precisely what is to happen.

Everyone loves the Irish (or so we like to think), we can use a neutral word like undocumented instead of a nasty word like illegal, and we can remind the Trump team that the Irish built much of America and continue to make a huge contribution to American society. But the idea that we can sidestep the fallout from whatever Trump does on illegal immigration is probably wishful thinking.

And it's not just what he might do in relation to the Irish who have been in America for years without legal status. It's also about what might happen to the various visa programs used by the young Irish to spend some time in America, including student visas and graduate visas, both of which benefited my own kids in recent years.

Anyone who imagines that because we (literally) rolled out the red carpet for him a few years ago, Trump is going to do Ireland any favors is probably mistaken. His irritation with Ireland and the EU over the planning problems he had with his Irish golf course and hotel in Co. Clare come across clearly in the interview he gave the London Sunday Times last weekend.

"A very unpleasant experience,” he called it.

On a more general level, the mood in Ireland before Trump's inauguration is one of uncertainty and anxiety. Like so many other people around the world, the Irish loved Obama and were captivated by his spell-binding rhetoric, his grace and dignity, his sense of humor, his humanity. In particular we will miss the thoughtful, articulate way he could tease out complex issues in his speeches.

That more than anything else illustrates the stark contrast between Obama and Trump, who can barely string two coherent sentences together. (It's no wonder he loves Twitter, where a few disjointed phrases will do.) He's a sulky, tongue-tied adolescent when compared with Obama and his grown-up, intelligent, detailed presentations.

For the Irish, with our love of words, this matters. But it's more serious than just not having a facility with words.

The new inane, incoherent reality was fully exposed last week when Trump finally held a proper press conference. Much more disturbing than the row with CNN was Trump's failure to go into detail about anything -- Syria, Russia, the economy, immigration, world trade, etc, etc.

Instead all we got was the same one-liners he had trotted out during the campaign. It's now beginning to look like this may be as deep as his thinking gets, which is worrying because the real world is complex, not simple.

This is far more important than anything he may have got up to in hotel rooms in Moscow a few years back which, if it were true, would only matter if he allowed the Russians to blackmail him. What he would do if Putin decides to march into Latvia next year does matter, however. Is he fully committed to the NATO defense of Europe?

As if all this were not enough, we also have Brexit coming down the tracks, which could be devastating for the Irish economy. At the very time we will need the support of America, Trump instead may pull the rug from under us without a moment's thought.