knowledge 7 April 2025 |

Three things Irish businesses - and their lawyers - need to consider in the wake of Trump’s tariffs

The imposition of a 20% tariff (subject to certain exemptions) on these imports will be felt across virtually all sectors and industries in the Irish economy, and in turn, have significant and complex legal implications.

Effective 5 April 2025, a 10% baseline tariff will apply to all countries. However, from 9 April, the EU will face a 20% reciprocal tariff across a broad product range. This disparity threatens the competitiveness of key Irish sectors, including food and drink and med-tech, against nations like the UK and New Zealand, which will maintain the lower 10% rate. While the pharmaceutical industry received a temporary exemption—a notable, though potentially fleeting, reprieve—businesses should proactively assess the legal implications and prepare for potential future tariffs.

The precise impact of the imposition of such wide-ranging tariffs will take time to assess. The EU’s response to Trump’s announcement will be critical to assessing where things may go.  In the meantime, businesses and their legal counsels will need to consider the following:

1. The impact of the 20% tariff on supply chains and the cost of exported products; in this regard, transfer pricing arrangements with US entities will come under intense scrutiny.
2. Review existing contractual arrangements to identify any potential reliefs which could be availed of and to identify any potential exposure to legal action because of unwinding or changing arrangements.
3. If companies make changes to their transfer pricing policies, this is likely to necessitate changes to legal documentation like intercompany agreements, IP licence arrangements, supplier arrangements, tax, and potentially connected issues like employment, if functions/people are being moved to tie to new transfer pricing.

A point of particular concern for Irish businesses is that the US’s tariffs will leave Northern Ireland in a complicated position and will challenge the Windsor Framework (the post-Brexit trading rules agreed by the EU and the UK in relation to Northern Ireland). Under this Framework, goods entering Northern Ireland must meet EU rules. Therefore, any retaliation by the EU in the form of counter-tariffs or other countermeasures could lead to a situation in which Northern Irish exports to the US face the same lower tariff rate of 10% as the rest of the UK, but US imports to Northern Ireland are subject to EU countermeasures when the rest of the UK is not. This is likely to pose significant political, economic, logistical and potential legal challenges for many Northern Irish industries.

While the imposition of tariffs is a serious challenge to the Irish economy and the wider EU economy, the fact that the baseline tariff has been set at 10% suggests that this is the tariff level which President Trump wants to see in place.  However, it is likely to take a long period of negotiation between the EU and the US before we get certainty on how this is going to play out.

This announcement is not the end but more likely the beginning of a long dance between the EU and the US on tariffs. The imposition of these tariffs undermines the strong transatlantic partnerships on which many Irish businesses rely, and which have been built over many years. Ireland’s legal sector will help clients to manage the fallout from the imposition of these tariffs and to mitigate the damage which these tariffs may cause to the Irish economy. It is essential that businesses and their legal teams act sooner rather than later to protect and maintain their existing business and to build resilience to face the future challenges which will accompany this move towards a previously unforeseen high-tariff trading environment.