Europe

How US president-elect's tax plans could hurt Ireland

Doonbeg
Image caption Trump International at Doonbeg, County Clare overlooks the Atlantic Ocean towards the US

Doughmore Bay is picture-book Ireland - a huge, sweeping semi-circle of sand sprayed by Atlantic surf.

Overlooking the beach, just over a sandy ridge, is the Irish outpost of the US president-elect's business empire - Trump International Golf Links and Hotel Doonbeg.

The golf course, designed by Greg Norman, and the five-star accommodation attracts well-moneyed guests - and generates valuable tourism revenue for County Clare.

In Doonbeg village, just a two-iron away, people are grateful to Donald Trump.

Many people work at the resort.

"I've met Mr Trump twice," one employee told me proudly.

"I spoke with him for a few minutes. He's a very nice person."

Image caption Many people in Doonbeg are grateful to Donald Trump for his investment in the area

Publican Tommy Comerford said the billionaire has brought benefits.

"For us in Doonbeg who need investment, we think it's very important to have an investor like him," he explained.

"Mr Trump had to spend a lot on restoring the golf course, after severe storm damage in 2014.

"A couple of hundred people are employed there, and they seem to be very happy."

Distant relatives

Rather incredibly for such a small village, Doonbeg has connections not just to Donald Trump, but also to the vice president-elect - Mike Pence.

He visited Doonbeg a few years ago, looking for information about his great-grandparents, who were from the area and emigrated to America in the 1850s.

Tommy Comerford said his sister pointed Mr Pence in the direction of a local man who turned out to be related to him.

The bar owner recalled how Mr Pence dropped into his pub: "He came across as a lovely man, and we had a great chat with him."

Across the street from Comerford's Pub is another local institution - Tubridy's Bar and Restaurant.

Tommy Tubridy told me he expects the remarkable links to the top two men in the next White House administration to draw more American visitors.

Image caption Tommy Tubridy, a bar owner in Doonbeg, said he hoped the election of Donald Trump would bring US visitors

"Bookings are up and business is up," he said. "And I understand business is looking very good for the golf course in the next 12 months."

It's no surprise that this tiny seaside village on the wild Irish western seaboard is now being nicknamed "Trumptown".

But economists, politicians and businesspeople in the rest of the country are wondering what wider effect Donald Trump's tax and trade policies will have - in particular, how far he will go to try to stop jobs in US companies going outside America itself.

Vital relationship

The Republic of Ireland has built its economy by using a low corporation tax rate of 12.5% to attract big American multinationals.

Some of the biggest names in information technology and the pharmaceutical industry are among the 700 US companies that have relocated to the Republic.

Image caption Doonbeg is just one of the areas in the Republic of Ireland to benefit from US investment

They employ around 140,000 people in the country.

According to the American Chamber of Commerce in Ireland, which represents US companies, the total value of American investment is just under £250bn.

The vital relationship Ireland has with the US explains why remarks by Stephen Moore, a senior economic advisor to Donald Trump, made major headlines in the Irish media.

Just after the presidential election, Mr Moore told The World At One on BBC Radio 4 that the new administration would cut the US corporation tax rate from 35% to 15-20%.

He went on: "If we do that, you're going to see a flood of companies leaving Ireland and Canada and Germany and France and coming back to the United States."

Mr Moore was more measured in later comments.

Image caption While Doonbeg is happy, the rest of the Republic waits to hear what Donald Trump's plans will mean for US investment

The government agency charged with attracting foreign direct investment to Ireland, the Industrial Development Authority, has played down the prospect of US firms leaving.

It has said there are many reasons why American companies come to the country, including access to markets and talent.

Talking Trump

But economist Dr Owen O'Brien, from University College Cork, believes the Trump administration's tax plans may cause problems for Ireland.

"I think it will affect more long-term investment rather than short-term," he said.

"The likes of Google and Intel and Boston Scientific and all those companies which are operating in Ireland are very happy with what's going on here - they have trained their graduates, they're very successful firms.

"But I think that once the pressure comes on, companies could think of moving."

Back by the golf course on the Atlantic coast, people talk up Trump.

The Doonbeg dollar may be on the rise - but the wider picture for Ireland is less clear.