Trump’s Liberation Day: what could US import tariffs mean for NI food and drink?

Wednesday this week was officially president Donald Trump’s so-called ‘Liberation Day’, with the US launching eye-watering tariffs of varying rates on all imports.

The UK was hit with a 10% levy – the base rate – while other “worst offenders” were charged additional fees, like the EU which took a gut-punching 20% fee.

This decision will affect more than £60bn-worth of British exports to the US, including scotch whisky – the food and drink industry’s biggest export to the US, worth around £1bn in annual market value – and other popular goods such as salmon, cheese and chocolate.

The Scotch Whisky Association said it was “disappointed” by the news. Many producers still recall Trump’s first-term tariffs on single malts, which cost the industry £600m in sales in just 18 months. Salmon Scotland echoed the SWA’s comments, but added it was “confident” US consumers would continue to purchase imported Scottish salmon.

The reality is many businesses are still holding on to the hope that Keir Starmer’s long-promised UK-US trade deal might ease these new pains. The PM told business chiefs in Downing Street on Thursday morning that “clearly there will be an economic impact” but that the government’s “intention remains to secure a deal”. For now, it seems the UK will not introduce retaliatory tariffs but will instead continue to pursue such an agreement.

Across the Channel, meanwhile, there is little chance of mercy, as the White House has long taken issue with the US-EU trade inbalance. The bloc has already pledged to retaliate heavily, and is set to target popular US goods like bourbon, orange juice and denim.

But this disparity in treatment raises a crucial question – what about Northern Ireland?

What could Trump’s tariffs mean for Northern Ireland?

NI has had unique access to both the UK and EU single markets since the implementation of the Windsor Framework, the post-Brexit treaty that oversees trade on the island of Ireland in a way that prevents a hard border.

But the framework’s complex rules are now seeing their cracks exposed by the threat of tariffs on US imports. Because while NI remains in the UK single market, it also largely abides by EU customs rules – meaning NI businesses could stand to lose out even if the UK manages to strike a deal to escape tariffs, so long as the EU is affected.

Theoretically, NI exports to the US should be treated as though from the UK, so the 10% applies vs the 20% on exports from the Republic of Ireland.

But as a House of Commons Library paper by clerk adviser Leigh Gibson warned, “US customs authorities may decide to step up checks at their border if they suspect that goods originating in the EU may be routed through Northern Ireland to avoid a higher tariff”.

This could “cause delays, uncertainty and additional administrative burdens for legitimate exporters in Northern Ireland”.

There are also concerns over which ‘Irish’ branded goods might be affected, as the term is typically used outside the UK for goods made across the entire island of Ireland, which could cause confusion for US traders and inspectors.

Read more: What does Trump’s tariff showdown mean for UK food and drink?

How will EU tariffs be affected?

The biggest headache, though, is around the EU’s retaliatory measures, and how they could affect goods entering Northern Ireland. Any products entering NI from outside the EU are currently treated as ‘at risk’ of being moved into the bloc’s single market, with EU tariffs generally applying to these ‘at risk’ goods where the EU tariff is higher than the equivalent UK tariff.

This could potentially put off US businesses from exporting directly to Northern Ireland or using it as the entry point to the rest of Great Britain.

Businesses in Northern Ireland can recover the tariff paid on goods they can show have not ended up in the EU, Gibson also noted. But they will “need to weigh the cost of making a claim against the amount they can recover” and “in many cases, extra costs may be passed on to Northern Ireland consumers”.

Ultimately, the real-life impact of one of the biggest rewrites of US trade policy in decades is still to be understood – not least because it will take time to unravel, and the effects on global supply chains could be huge and long-lasting.

It is also worth remembering Trump has changed his mind several times on matters of tariffs, with many believing this may be a negotiation tactic. Either way, businesses across the UK should be doing their homework and preparing for any scenario.