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Tariffs – the new trading reality
The recent announcement of an agreement between the EU and United States (US) will see the introduction of a standardised 15% tariff rate on a broad range of goods imported into the US from the EU and lowers tariffs on many goods going in the opposite direction. This marks a major turning point in transatlantic trade relations, writes our Head of Public Sector Services & Economics, Karol Kissane. It should be noted that items the EU deem as ʻsensitive sectors’ such as beef and ethanol will not see rates lowered for such products imported into the EU from the US.
The implementation of this unified tariff on EU imports into the United States mitigates recent uncertainties and higher rates earlier this year. However, it does not automatically provide relief. For Irish exporters heightened vigilance, adaptability, and strategic planning remain essential.
The story first appeared in our 2025 Food & Agribusiness Report
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One third of survey respondents from our 2025 Food & Agribusiness Report consider tariffs as one of the most concerning macroeconomic factors, with 38% saying uncertainty around trading tariffs is one of their biggest challenges to sales outside Ireland. 66% of respondents exporting to the US said uncertainty around trading tariffs is one of their biggest challenges to sales outside Ireland. As has been experienced to date during the second Trump Presidency the only certainty is uncertainty, there are no guarantees that the trading landscape will not change again.
What does the new agreement mean for Irish businesses?
The agreement applies to products that were subject to highly variable tariffs over the last number of months. While the new 15% ceiling on many goods simplifies the regime, it still represents a cost increase for many companies previously trading under the Most Favoured Nation rate, which averaged c.4.8% on exports to the US.
For Irish exporters in sectors such as agrifood, drinks, food processing equipment, dairy technology and machinery, the new tariffs introduce pressure on margins and pricing. The new agreement will see the rate of 15% applying to exports who had a rate of less than 15% before the first Trump tariffs were announced in April 2025, while any exports which had a rate of greater than 15% before that announcement in April 2025 will now revert to the previous rate which was greater than 15%.
For goods which are subject to a fixed duty, such as dollars per kilogram of product, the equivalent percentage rate of duty will be calculated by dividing the duty payable by the customs value of the goods.
When is 15% less than 10%?
The EU’s new 15% tariff agreement with the US is an all-inclusive ceiling, covering existing Most Favoured Nation (MFN) duties, unlike the UK’s 10% rate which adds on top of MFN tariffs. In practice, this means the EU often faces a lower effective tariff than the UK. For example, EU cheese exports face a flat 15% tariff. while UK cheese exports face 10% plus the existing 14.9% MFN rate, totalling nearly 25%. While some UK products may see marginal advantages, the EU deal secures broader, more predictable market access across many key goods.
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A new era of strategic trade management
This agreement does not end trade risk. Rather, it formalises a new, semi-protectionist status quo that businesses must actively manage. It reflects a wider trend toward managed trade between the EU and US, but also in Ireland’s dealings with post-Brexit UK, and emerging supply shifts involving Asia and South America. The fact that different rates are applicable for exports from the UK to the US further complicates matters
Economic implications for Ireland
Irish-US trade topped €72.6 billion in 2024*, with Irish agrifood and drinks and high-value agri machinery and components playing a significant role. Agrifood and drinks alone accounted for over €1.9 billion of exports to the US in 2024**. The 15% tariff may dent some subsectors but could also enhance stability and prevent future trade wars.
For businesses, the real challenge is adapting quickly. Those who embed trade resilience into their models through cost control, contract discipline, digital tracking, and proactive pricing will come out stronger.
Beyond tariffs: bigger supply chain trends
Reshoring and nearshoring are back on the table. President Trump is pushing for more manufacturing to take place in the US.
Digital customs and compliance mean companies need to modernise their documentation and traceability systems to ensure correct rates are applied to the correct products.
Sustainability and traceability are also under scrutiny. How will EU initiatives such as Carbon Border Adjustment Mechanism fit in this new environment, will there be resistance from the US?
Eight key actions to take now
1. Reassess supply chains
Review all imported and exported products for exposure to tariffs. Assess whether pricing or sourcing strategies need to change. Our team can support supplier mapping and procurement analysis.
2. Review contracts
Scrutinise trade and distribution contracts for tariff clauses. Who bears the cost under DDP (Delivered Duty Paid) or EXW (Ex Works) terms? Consider whether revised intercompany terms or tariff pass-through language should be added in future contracts.
3. Know your margins
Do not rely on averages. Build a product-level margin map that shows where tariffs may erode profits. This can support tactical decisions on which lines to push, protect, or reprice. Ifac are working with a range of companies in the Irish agrifood sector to help them understand their pricing and margins better including Stock Keeping Unit level margin management.
4. Identify efficiency opportunities
Offset tariff costs by unlocking internal savings. Examine areas such as inventory management, cost-to-serve, and production yield improvements.
5. Model scenarios
Use ʻwhat if’ modelling to test the impact of tariff scenarios, cost inflation, or reduced demand. Sensitivity analysis is vital to forecast where margin pressure may surface.
6. Plan cashflow accordingly
Tariffs may mean higher upfront costs for stock, delayed margins, and stretched working capital. Cashflow forecasts should incorporate these changes, especially for companies seeking bank financing or grants.
7. Optimise customs valuation
Consider whether customs values can be lawfully reduced for example, by referencing the ʻfirst sale price’ when using intermediaries.
8. Monitor global trade movements
The US-EU agreement may set a precedent for deals with other countries or blocs. Irish businesses sourcing from or selling to Asia or Latin America should keep alert to emerging trends and tariff alignment efforts.
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