The risks from Trump’s tariffs are everywhere

The first 10% of the new tariffs on exports to the US came into effect over the weekend and the additional 10% to be levied on exports from the EU will come into effect early on the morning of Wednesday 9 April.

The two Irish agricultural sectors most exposed are dairy, through butter sales, and tillage through grain for whiskey sales.

However, there is no sector which will escape unscathed from a trade dispute between the world’s largest economies.

There is considerable evidence that customers for key products in the US had built stockpiles ahead of Trump’s widely-expected tariff announcement – in the three months following his election victory, the volume of Irish butter exports to the US increased by more than 35% when compared to the same period a year earlier.

The wider trend can also be seen in amount of overall goods exported globally to the US, with industry insiders suggesting there was a 30%-40% increase in demand for extra capacity on major routes towards the end of 2024.

All of this means that there is already a lot of “stuff” in the US, so if a deal can be reached on tariffs in the short term, the effect on consumer prices there and exporters here could be quite limited.

However, should the tariffs remain in place for longer, or the trade situation deteriorate further due to retaliations, market access and US consumer demand could be severely dented.

Under that scenario it is hard to see how butter and whiskey exports could maintain their current levels.

If countries outside the US also start to reduce trade barriers between themselves – such as implementing the Mercosur trade deal, or increased co-operation between the EU and China – there may be challenges and opportunities for the Irish agri-food sector.

Fundamentally, there is still a huge amount that is unknown about how the current situation will develop.

But there can be some certainty that the longer the tariffs remain in place the more damage that will be done to every Irish exporter’s current business model.