Dan Mulhall: Ireland ought to strengthen its EU and UK ties as Trump flexes muscles

We ought to proactively strengthen our position within the EU, invigorate trade links with Britain

Dan Mulhall

As published on: https://www.businesspost.ie/analysis-opinion/dan-mulhall-ireland-ought-to-strengthen-its-eu-and-uk-ties-as-trump-flexes-muscles/

The open global trading system from which Ireland has benefited so substantially in recent decades is under pressure, and economic nationalism is clearly on the rise. As trade shocks become more frequent and global supply chains face growing disruptions, Ireland may need to reassess its approach to international trade.

The election of Donald Trump with his enthusiasm for tariffs has brought the risk of “trade shocks” to the fore. A drift towards deglobalisation would be detrimental to Ireland’s open, trade-dependent economy.

There is also a very real prospect that America First policies will outlive the Trump Administration. Protectionist measures are becoming embedded in US thinking, and even a change in leadership may not fully reverse the course set in recent times.

Ireland must learn to cope with these new realities, including in the short term by working with our EU partners to mitigate the impact of US tariffs. With such uncertainty on the transatlantic trade front, it may also be time for us to hedge our bets and focus more acutely on our near abroad.

The good news is that Ireland has strong alternative trade routes to leverage. A renewed push on our part to exploit the opportunities available to us in Britain and across the EU makes perfect sense.

Aside from its other pluses, such a strategy can serve to reinforce our appeal to US companies requiring a launchpad into European markets. By presenting ourselves as a reliable gateway to the EU, we can maintain our attractiveness to foreign investors while reducing over-dependence on transatlantic trade.

Both governments have expressed a commitment to resetting British-Irish relations, and a key part of that must be strengthening trade and connectivity. This includes tackling the challenges faced by SMEs, particularly the costs and delays associated with exporting to or transiting through Britain.

It is time also for us to lean in more vigorously to our EU membership by giving even greater priority to enhancing our export footprint across the EU, which is Ireland’s largest export market, accounting for 40 per cent of our exports in value terms. Those figures need to increase to offset potential reductions in transatlantic trade flows.

The UK clearly wants closer ties with the EU but is wary of potential domestic political fallout. As Ireland would benefit from a greater coming together of the EU and UK, there is scope for us to champion that process within the EU, including during our EU Presidency next year.

Pragmatism should guide EU-UK relations, and Ireland is uniquely placed to advocate for practical solutions that enhance economic cooperation without generating political tensions. One piece of low-hanging fruit is an EU-UK veterinary and phytosanitary agreement, which Ireland would be well placed to promote.

Britain now accounts for just 7 per cent of total Irish exports, but it remains vitally important to our SMEs, which are predominantly Irish-owned. The value of our exports to Britain actually fell by 10 per cent in 2024, which means that there is clearly work to be done in boosting trade with our nearest neighbour.

Exports to Britain began declining before Brexit as Irish businesses sensibly sought to diversify away from the British market.

While Brexit-related customs arrangements have added to costs and delays, the worst fears of tariffs and regulatory divergence have not come to pass, meaning that the time may be right to encourage a pivot back to trade across the Irish Sea.

With businesses in both countries adjusting to the post-Brexit landscape, opportunities exist to further strengthen these commercial links.

Before the last Budget, Rockwood Public Affairs commissioned Amárach Research to survey 345 Irish SMEs.

Some 34 per cent of those surveyed identified a reduction in customs formalities for exporting to Britain as a key concern. Indeed, it was nearly as big an issue as labour and energy costs.

Ireland will assume the presidency of the Council of the European Union in 2026, offering a unique opportunity to influence EU trade policy at a critical time for Europe’s economic future.

Poland’s 2025 EU Presidency is focusing on the theme of security – “Security, Europe!” – acknowledging geopolitical threats facing Europe. Ireland’s presidency could seek to reinforce economic security through stronger trade ties within the EU and with the UK. This would signal that economic strength is a vital component of broader European security. Ireland could perhaps seek to champion policies that deepen pan-European and EU-UK trade ties under the slogan, “Stronger Trade, Stronger Europe”.

As global trade patterns shift and protectionism gains ground, Ireland cannot afford to be complacent.

We ought to proactively strengthen our position within the EU, invigorate trade links with Britain, and offer ourselves as a stable and strategic bridge between transatlantic and European markets. The years ahead will clearly bring challenges, especially for our transatlantic trade ties, but we are not without options. A clear-eyed, strategic approach to trade, with diversification at its heart, will pay dividends.

Dan Mulhall is a former Irish ambassador to the US and the UK, and is currently a consultant with Rockwood Public Affairs