Public confidence in the Irish economy has declined, despite record export levels. The latest Red C/Business Post poll revealed that Irish consumers have a pessimistic view of Ireland’s economic prospects. 82 per cent believe that the economy will weaken over the next half-year. This reflects a notable shift in consumer sentiment compared with January 2025, where just 44 per cent anticipated an economic downturn. This stems from the current unstable economic landscape, shaped by Trump’s unpredictable trade policies, particularly the threat of tariffs targeting Irish pharmaceutical exports.
According to a forecast modelling the effects of U.S tariffs on the Irish economy released by the Department of Finance, prolonged U.S tariffs of ten per cent would reduce GDP by 1.5 per cent in 2026. Employment growth would also be affected with approximately 25,000 fewer jobs by the end of 2026. The Department also published a forecast which assumes no import tariffs. In this case, GDP would grow by an estimated 3.4 per cent.
However, despite the economic uncertainty, goods exports surged to a record level in March 2025. In March 2025, unadjusted goods exports rose to €37.3 billion, representing a 94.3% increase (€18.1 billion) compared to the same month in 2024, when the value stood at €19.2 billion. Over the first quarter of 2025, goods exports totalled €88.4 billion, an increase of 63.6% from €54 billion recorded in Q1 2024. This stark increase can be attributed almost solely to businesses seeking to frontload exports to the U.S prior to further tariffs coming into effect.
Tánaiste Simon Harris met with EU trade commissioner Maroš Šefčovič, on Thursday 15 May, to provide an update on his discussions with Irish pharmaceutical leaders. Harris cautioned the U.S against imposing tariffs on pharmaceuticals amid ongoing trade talks with the EU, warning that such a move would undermine the talks. He criticised a “fundamental misunderstanding” within parts of the U.S government regarding pharmaceutical supply chains. On Wednesday 14 May, Šefčovič and U.S Commerce Secretary Howard Lutnick agreed to intensify discussions to inject momentum into slow-moving talks.
With trade negotiations between the U.S and EU on going, it emerged on Thursday 15 May, that Europe is unlikely to accept a U.K style trade deal with the U.S. European officials are likely to seek more ambitious trade terms with the Trump administration, according to several EU sources.
