The Central Bank has warned that Ireland faces significant economic risks as the United States and the European Union continue trade talks ahead of a July 9th deadline.
In its latest quarterly bulletin, the Bank highlights the dangers posed by a possible drop in corporate tax receipts, falling investment, and slower economic growth. The uncertainty surrounding the outcome of the EU-US negotiations is already affecting business confidence and investment levels. As a result, the Bank has revised down its economic forecasts for the year.
While recent signals from both sides suggest a more constructive tone, major hurdles remain. The United States appears determined to maintain its current 10 per cent tariffs, regardless of the outcome. It is also unclear what concessions the EU can realistically offer, and how President Donald Trump might respond.
The Central Bank’s analysis builds on earlier work by the Government and the Economic and Social Research Institute (ESRI), reinforcing concerns about Ireland’s economic vulnerability. The country’s reliance on a small number of large multinational firms means both corporate and income tax revenues are highly concentrated. In a worst-case scenario, falling foreign investment and shrinking tax receipts could push Ireland’s public finances from surplus into a long-term deficit.
The message is clear: Ireland’s economic stability could be seriously affected if US trade policy shifts lead to major changes in how multinationals invest or pay tax.
To protect against these risks, the Central Bank calls for greater caution in budget planning and tighter control over day-to-day public spending. This would help ensure funding for critical infrastructure and public services remains available. The Bank also urges politicians to explore new sources of revenue to broaden the tax base and prepare for rising costs in the years ahead.
These are long-term issues that require consistent focus—something that can be easily overlooked amid the pressures of daily political debate.
