Trump adviser says many US companies will now leave Ireland
New corporate tax regime set to attract multinationals back to US
Large numbers of US companies will leave Ireland and relocate to the US to take advantage of a new corporate tax regime which the new presidency will put in place, a senior adviser to Donald Trump has said.
Stephen Moore, one of a group of senior economic advisers to the president-elect, said on BBC Radio that the centrepiece economic plan of the new administration was wooing back multinationals from overseas, involving a cut in the headline corporation tax rate from 35 per cent to 15 per cent.
Such a move would potentially threaten significant numbers of jobs in Ireland, where the rate is 12.5 per cent, but senior corporate advisers here say they do not believe established companies will leave.
However, most accept that Mr Trump’s tax policy, if implemented, would make it more difficult to attract future US investment by removing the incentive for US firms to locate overseas to cut their tax bill.
Mr Moore, a key figure in drafting Mr Trump’s tax plans, told BBC Radio the changed tax regime would have a “very high” impact on jobs.
“If you do that you are going to see a flood of companies leaving Ireland and Canada and Germany and France, and they are going to come back to the United States, ” he said.
Senior advisers in Ireland do not believe that a large number of US companies will leave as most are long-established and operating profitably here. Mr Trump will also have to get this tax plan safely through the US Congress.
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Feargal O’Rourke, managing partner in PricewaterhouseCoopers, said he did not see US companies leaving Ireland.
However if the tax changes are implemented, US firms would be “in less of an immediate hurry to relocate activities abroad that they can now carry on at home”.
The American Chamber of Commerce Ireland, the representative body for the major US multinationals , said in response to Mr Moore’s statement that US companies say talent, rather than tax rates, is “the number one reason why they invest in Ireland”.
IDA Ireland said it was confident that US investment here would remain strong in the years ahead.
Mr Moore, formerly a chief economist with US conservative think tank the Heritage Foundation, said the effort to entice companies back from low corporate tax-rate countries was the “single most important thing for our country right now”.
US companies “are effectively renouncing their US citizenship and they are moving to Canada, to Britain, to Ireland, to China and Mexico”, he said.
The Government here, meanwhile, is moving to build relations with the incoming administration.
Taoiseach Enda Kenny spoke to Mr Trump by telephone late on Wednesday night and yesterday said the president-elect “understands Ireland very well”.
Government sources have defended Mr Kenny’s public statements and attitude towards Mr Trump since his election, with some criticism that the Taoiseach was being too warm to someone he just months ago criticised for using “racist and dangerous” language.
“What are we supposed to do?” asked one source, who added that the Government is prepared to weather criticism for getting close to Mr Trump’s incoming administration.
It is argued that the importance of protecting Ireland’s interests is the primary objective, particularly thousands of jobs reliant on American multinationals in Ireland.