Sunday 18 March 2018

I'll lure companies back to US, warns Trump as he praises Ireland

US President Donald Trump. Photo: Evan Vucci/AP
US President Donald Trump. Photo: Evan Vucci/AP
Colm Kelpie

Colm Kelpie

Donald Trump has warned that he will actively lure American multinational companies home from Ireland.

The US president heaped praise on Ireland for doing an "amazing job" in handling the financial crisis. He said he gave Ireland "a lot, a lot of credit" for not raising taxes.

Mr Trump said that as a result the country is "thriving" and a lot of companies have moved here - but he said: "We're going to be getting a lot of companies moving back."

"You look at Ireland. I own great property in Ireland that I bought during their downturn. And I give the Irish a lot, a lot of credit," Mr Trump told 'The Economist'.

"They never raised their taxes. You know you would have thought when they were going through that really…they would've double and tripled their taxes. They never raised it a penny.

Read More: Ireland impresses The Donald - again

"And they got through it and they are thriving now. Ireland's done an amazing job. A lot of companies have moved to Ireland and they like it. But we're going to be getting a lot of companies moving back and we're going to get very few companies leaving the United States."

Mr Trump has pledged to ensure US firms overseas shift operations back home and has raised the spectre of punitive tariffs for companies operating offshore that do not provide employment or pay tax in the US.

The Irish economy is unusually vulnerable to the knock-on effects of US tax policy. Mainly US multinationals support around 400,000 Irish jobs directly and indirectly and the US remains one of Ireland's biggest export markets.

Any policy shift that makes it less attractive for US firms to invest abroad or that hurts cross-border trade would hit Ireland hard, a concern since Mr Trump's election on an "America First" platform.

Mr Trump's administration announced a tax reform plan last month that proposes slashing the US corporate tax rate from 35pc to 15pc, a move which would put it in close competition with Ireland.

US officials called it the "biggest tax cut" in US history, proposing lower taxes for firms, the middle class and the wealthy.

But the one-page policy document presented by the White House left details of when the cuts will be implemented, over what time frame or how they will be paid for all unanswered.

There was also a proposal for a one-off tax deal to bring home $2.6tn (€2.39tn) in profits parked offshore by corporations, and a longer-term shift to tax US firms' profits under what is called a territorial system, in which most foreign profits would be exempt from US taxes.

A territorial system would end practices that currently distort the global tax system, including US corporations shifting their tax domiciles to Ireland to cut bills.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business