As the Republic’s Ministers jet off for the annual diplomatic offensive that accompanies St Patrick’s Day, they head out into a more volatile and complicated world.
In capitals worldwide, they will be selling a familiar message: the Republic is open to trade and is a stable and reliable base for global investment. But the world they are pitching to is more fragmented and less predictable.
Businesses are managing near-weekly whiplash as geopolitics spills into daily economic reality. The threat, imposition, striking down and reimposition of US tariffs continues to reverberate globally. Conflict, as recent developments in the Middle East remind us, has a profound impact.
The State’s challenge, and that of our policymakers, is to navigate a world where the rules of global trade and investment are being rewritten in real time.
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We are witnessing a shift from what many governments describe as “derisking” to what often looks more like a deeper form of decoupling. Diverging technology standards, supply chain security policies, export controls and industrial strategies are creating new global fault lines.
The resurgence of industrial policy, on a scale not seen for decades, is reinforcing these divides. Big powers are now deploying incentives, restrictions and subsidies at unprecedented levels, reshaping global investment flows in the process.
The era of economies being open by default is shifting to one of managed openness. Investment remains welcome, but the conditions surrounding it have multiplied. Screening mechanisms, once used sparingly, have expanded significantly, with national security considerations now stretching across data, technology, supply chains and talent flows.
The growing entanglement of economics and geopolitics is one of the defining features of this new era. Trade is no longer governed solely by efficiency and comparative advantage, but increasingly by resilience, political alignment and risk management.
Firms invest not just to grow, but to protect their ability to trade at all.
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The global competition for investment has never been more intense. Countries around the world are adjusting policy to attract the next wave of high-value projects, particularly in technology, renewable energy, pharmaceuticals and advanced manufacturing.
Our economic model has always rested on deep integration into global trade networks, with foreign direct investment (FDI) acting as the bridge between global markets and domestic capability. As trade becomes more contested and rules-based systems falter, the value of being a stable, trusted and well-connected node in global trade flows rises rather than falls.
Investment decisions often follow trade patterns, with firms investing abroad to secure market access, stabilise supply chains and hedge against trade policy risks. When trade flows become uncertain, companies increasingly use FDI to anchor their operations, reduce exposure to tariff shocks and strengthen their strategic footprint in key regions.
In a multipolar world, investment decisions, particularly in high-value sectors, are increasingly shaped by geopolitical alignment. Cross-border projects are not evaluated solely on commercial merit; they are increasingly filtered through strategic considerations around the political or technological camp to which they are perceived to belong. Host countries are subject to the same scrutiny. Over the coming weeks, our politicians will need to walk a delicate tightrope of managing those perceptions.
The impacts are not limited to the largest multinationals. Smaller and mid‑sized companies are entering global markets in greater numbers than before, yet they often lack the internal expertise to navigate the regulatory and political complexities now embedded in internationalisation. The result is rising transaction costs, greater uncertainty, and operational inefficiencies that did not exist even a decade ago.
Although Ireland may struggle to shape global geopolitical trends, we can understand and respond to them. It is also worth remembering that the core motivations for why companies invest abroad have not changed. Firms continue to seek access to markets, talent and innovation. They remain focused on building globally integrated operations that strengthen their technological and competitive edge.
What has changed is the environment in which those decisions are made. Companies must now weigh industrial policy, national security reviews, supply chain resilience and geopolitical alignment alongside traditional economic considerations. Even when these issues do not ultimately determine investment decisions, they occupy an increasing share of boardroom attention.
The Republic’s competitive advantages remain substantial: a skilled workforce; strong innovation ecosystems; deep sectoral clusters; and a long-standing reputation for reliability. If we remain agile and forward-looking, and address our domestic weaknesses, we can continue to be a place where global companies choose to innovate, invest and grow.
The system has not yet reached a new equilibrium and neither have the trading systems that support it. But in a world defined by volatility and conflict, stability and openness may prove to be a persuasive sales pitch.
- Martin Shanahan is a partner and head of industry at Grant Thornton
