Ireland talks tough on Israel, until Silicon Valley comes calling
Pressure from business groups and lobbyists has left Ireland scrambling to rethink its diplomatic attacks on Israel, signaling the strength of Startup Nation and its close ties with American multinational corporations.
Ireland’s government may be one of Israel’s biggest critics speaking on the ongoing war with Hamas in Gaza, but money speaks louder: The EU country is expected to curb planned trade sanctions on Israeli settlements in the West Bank after receiving pressure from business groups concerned about the impact on investment.
According to a report first published by Reuters, business representatives in Ireland are trying to convince the government to delay legislation and reduce the scope of trade sanctions on Israel in an effort not to antagonize American companies and investors, deterring them from investing in Ireland.
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Ireland and Israel face a soured relationship, both diplomatically and economically.
(Photo: Yuriy Boyko/Shutterstock)
Ireland is uniquely positioned in the EU as a low-tax hub for American companies that enjoy its low corporate tax rate of 12.5%, which is significantly lower than the OECD average of around 23%. This means many companies set up headquarters in Ireland, resulting in US-owned foreign multinationals employing around 11% of Irish workers. These companies, which include Apple, Google, and others, contribute most of the corporate tax that totals nearly a third of all Irish tax receipts. Ironically, it is Ireland's attractive tax policy for these large companies that grant them significant leverage on policy, making the country more vulnerable than other EU countries that hold anti-Israel positions.
Although no final decision has been made on the proposal, some warn the bill could further strain relations with both Washington and Jerusalem. The ongoing tension between Ireland’s diplomatic ambitions and U.S. pressure underscores the influence of Israel’s Startup Nation and the global reach of American multinationals that also operate there.
Israel’s deep integration with U.S. multinationals may also be shaping Washington’s reluctance to see Dublin impose sanctions. With major firms such as Microsoft, Apple, and Amazon operating in both countries, Ireland’s room to maneuver diplomatically appears to be shrinking.
Business lobby groups and company representatives warn that penalizing Israeli settlements could hit the multinationals and hurt investment in Ireland. The Irish Business and Employers Confederation also publicly shared its concerns about Ireland’s actions, claiming that the U.S. could penalize companies in Ireland for boycotting Israel.
This isn’t the first time Startup Nation has been able to flex its muscles to influence decisions in Ireland. In 2023, Israeli entrepreneurs and a slew of American companies with a presence in Israel, such as Alphabet and Intel, withdrew from the prestigious Web Summit following then-CEO Paddy Cosgrave’s comments accusing Israel of war crimes mere days after the Hamas attack.
Overall, ties between Israel and Ireland have been challenging since the war broke out two years ago. Ireland has been among the most vocal EU states in criticizing Israel’s military actions in Gaza, and Irish leaders have repeatedly emphasized human rights, international law, and called for a two‐state solution. By the end of 2023, support for Israel fell to a new low, and in 2024, Israel closed its embassy in Dublin, although Ireland has not closed its embassy in Israel.
Economically, the countries have similarly soured. Since the start of 2025, Israeli exports to Ireland have plunged over 50%, with chip exports specifically having dropped dramatically: from $369 million in July 2024 to just $40 million in July 2025, a fall of about 90%.
Ireland’s attempts to counter this with trade sanctions appear to be failing. if American companies and Pressure from American companies and domestic business leaders may push the government toward more cautious measures—or toward symbolic gestures such as recognizing Palestine or boycotting Eurovision if Israel participates.
