Irish dairy exports previously experienced an additional tariff of 25% which came into effect in October 2019 and lasted until the middle of 2021.At the time Ireland accounted for 88% of all EU butter sales to the US.
Irish dairy exports previously experienced an additional tariff of 25% which came into effect in October 2019 and lasted until the middle of 2021.
At the time Ireland accounted for 88% of all EU butter sales to the US.
Despite the higher tariff, Irish butter exports to the US continued to perform remarkably well. In 2018 before the additional tariff, Bord Bia data shows that 23,228 tonnes of butter were exported to the US, in 2019 when the extra tariff came in late in the year, this increased to just over 28,000 tonnes.
Since then, butter exports to the US have increased further , climbing to over 57,000 tonnes last year.
Stockpiling
Given that the additional 25% tariff was in place for a relatively short period of time, stockpiling in advance will have offset the worst effects initially.
Also, trade from 2022 onwards is purely market-driven under normal tariff levels.
Irish butter is a premium product in the US and so demand for it is less price sensitive, a fact which no doubt sustained butter performance during the period of higher tariffs.
If those tariffs had been in place for a longer period or during the post-2022 cost of living crisis, the challenge may have been greater.
Similarly, while a 25% additional tariff may have been manageable over a short period, a 200% tariff as threatened for the drinks sector would be penal.
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