Trade, tax and business strategy during uncertainty

How Irish businesses can respond to policy shifts

The business world thrives on predictability. Stable policies, transparent regulations, and well-defined trade agreements give companies the confidence to invest, expand, and innovate. Over the past few months, certainty has been an increasingly scarce commodity.

For Ireland, recent US policy moves on tariffs and tax have heightened uncertainty, while the European Union’s responses add further complexity. With multinational corporations playing a major role in Ireland’s economy, any shift in trade or tax policy can have significant ripple effects.

From shifting US trade policy to evolving global tax frameworks, businesses operating across borders must recalibrate their strategies to remain competitive. The challenge is particularly acute for Ireland, given its role as a hub for multinational operations. As headlines on tariffs and counter-tariffs dominate financial pages daily, businesses could be forgiven for struggling to keep up. However, keep up they must.

Recent US policy moves on tariffs and tax have heightened uncertainty, while the European Union’s responses add further complexity.

Tariffs and political manoeuvring around the OECD tax framework have forced boardrooms to rethink everything from supply chains to investment decisions. Businesses cannot afford to wait. The question is no longer if change is coming, but how to adapt and respond effectively.

Video Series

Trade tariffs part 3: Business strategy in uncertain times

This series cuts through the speculation to identify the real and potential impacts on Ireland and Irish-based industries. It explains how tariffs affect the economy and explores what businesses can do to mitigate negative effects.

Tariffs rarely deliver positive outcomes, yet businesses must prepare for their impact. In this video, Peter Vale, tax partner at Grant Thornton, discusses the potential consequences of new tariffs and explores practical steps businesses can take to mitigate rising costs, protect margins, and adapt their supply chains. Ignoring the risks is not an option.

Watch Part 3 of our series to learn more.

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1.

Tariffs as a tax on trade

Tariffs function as a tax, raising costs for businesses and, in many cases, consumers. Irish exporters may have to accept reduced margins to stay competitive or explore alternatives, such as relocating production or sourcing to avoid exposure.

A secondary effect is the potential reconfiguration of supply chains, as companies assess whether shifting production or sourcing to alternative markets can mitigate tariff exposure.

Early indications suggest that some Irish businesses are already exploring options to relocate certain aspects of manufacturing within the US to sidestep tariffs altogether. However, such decisions will depend on how trade policy develops in the coming months.

Beyond goods, services and intellectual property transfers could also be affected. While tariffs primarily target physical products, the US has previously considered levying taxes on digital transactions and intangible assets held offshore. If these measures expand, Ireland’s position as a European tech and finance hub could come under pressure.

2.

A changing global tax landscape

US withdrawal from the OECD tax deal

Ireland faces a fresh threat to its income from American multinationals operating here after Trump moved to pull his country out of a landmark global corporate tax deal, setting up a potential standoff between his administration and the European Union.

The US president made the move in an executive order, withdrawing US support for the global tax pact agreed at the OECD last year that allows other countries to levy top-up taxes on US multinationals. While it has not garnered anywhere near as many headlines as tariffs, Trump’s executive order effectively puts the OECD’s pillar two framework on ice, although the expectation is that the EU and other blocs will continue to back it.

Implications for the global tax framework

The agreement, which set a minimum corporate tax rate of 15%, was designed to limit aggressive tax competition. Trump’s withdrawal from the deal raises questions about its implementation and enforcement.

For Ireland, this development is significant. The country aligned with the OECD framework in 2021, moving from its long-standing 12.5% corporate tax rate to the new global standard. If the US does not participate, other nations—including Ireland—may collect additional taxes from US multinationals, potentially triggering further countermeasures.

Potential economic and policy responses

Trump’s administration has framed the OECD tax deal as an extraterritorial attempt to tax American companies unfairly. If his administration moves to penalise countries that implement the OECD framework, Ireland may find itself facing new economic pressures.

Consideration may be given to deferring some of the more penal aspects of the global minimum tax rules, particularly in relation to US multinationals. However, this will be complex, as many jurisdictions have already aligned their tax regimes with the new framework.

3.

Strategic considerations for Irish businesses

With so much uncertainty, a reactive approach is unlikely to serve businesses well. Businesses should evaluate their exposure and develop contingency plans rather than waiting for clarity.

Key actions include:

Reviewing intra-company pricing structures to manage financial exposure.
Assessing supply chain resilience to geopolitical and economic shifts.
Considering reshoring, nearshoring, or diversifying suppliers to reduce dependence on any single region.
Identifying potential acquisition opportunities, as market disruption may create value for firms with strong balance sheets.

Beyond internal strategy, businesses can play a role in shaping the broader conversation. Industry groups and trade associations should engage with policymakers to highlight the real-world impact of policy changes.

4.

Looking ahead

While there may be some temptation to batten down the hatches until the storm passes, the current volatility in trade and tax policy is not an anomaly – it is the new normal. Some of the recent policy shifts may be reversed, but the broader trend suggests an era where businesses must be nimble, well-informed, and ready to pivot when necessary.

For Irish companies, the stakes are high. The country’s economic model is built on open trade, foreign direct investment, and a competitive tax regime. Any shifts in these advantages require a strategic response—one that prioritises agility and long-term competitiveness.

In an unpredictable world, the best strategy is not simply to react to change, but to anticipate it and adapt. The long game will belong to those who prepare today for the uncertainties of tomorrow.