Ireland has been one of the least affected by trade tariffs imposed by the US, but remains one of the most vulnerable to decisions in the White House, the OECD warns in its latest economic forecast.
The decision by President Trump to impose high tariffs on the European Union raised huge concerns in the EU and the Irish government earlier this year.
After a flurry of diplomatic efforts, the EU agreed to 15 percent tariffs on most sectors, much lower than previously feared.
Crucially European Commission President Ursula von der Leyen got Donald Trump to agree that if he subsequently imposed tariffs on the pharmaceutical sector, the European Union would not pay more than 15 percent either.
In September, Trump announced 100 percent tariffs on “any branded or patented pharmaceutical product” from outside the United States.
But the EU deal held and Ireland has been shielded from that hit.
“When you account for the exceptions that we secured and the additional rates which others have on top – we have the best agreement. Without any doubt”, said European Commission President, Ursula von der Leyen, at the time.
Several months on, and the data shows that Ireland has got off lightly.
In its latest Economic Outlook published this morning the OECD says that Ireland has experienced the second smallest impact of Trump tariffs. Only Slovenia has been impacted less amongst major economies around the world.
But the risks for Ireland remain.
Ireland has experienced soaring GDP growth this year thanks to pharma companies trying to export to the US before expected tariffs took effect.
Since Ireland has largely dodged those tariffs, GDP growth is expected to calm down. But it underlines the erratic position of the Irish economy.
On the prospects for Ireland, the OECD says:
“Heavy front-loading of goods exports, largely pharmaceuticals, drove strong GDP growth in the first half of 2025, while preliminary – and historically volatile – estimates suggest a marginal decline in the third quarter.
Despite high uncertainty, high-frequency data point to resilient new business growth in recent months,
although momentum was more moderate in manufacturing.
With unemployment steady around 5.0% since June, the labour market remains relatively tight, even though trends in job creation and wage growth are easing.
Retail sales and card payments suggest a mild moderation in consumer spending despite solid real income gains. The re-emergence of price pressures for food, energy, and some service components has pushed both headline and core harmonised consumer price inflation above 2.5%.”
The “possibility” of tariff rate increases by the United States and China is a “risk”, the OECD warns.
These could cover a “broader range of goods, including pharmaceuticals and semi-conductors, with supply-chain linkages propagating these widely. Higher prices for these goods could adversely affect demand from consumers as well as businesses.
Many countries would be hit by weaker US demand for products from these affected sectors. For instance, US demand for final consumption and intermediates of pharmaceuticals represents 12.2 percent of Ireland’s domestic value added in its exports.”