Navigating Tariff Challenges: The Impact on Irish Agri-Food Exports

Introduction

The trade relationship between the United States and the European Union is under fresh strain as Donald Trump threatens to impose a 25% tariff on EU exports. If these tariffs go ahead, Ireland’s agri-food sector will feel the impact most acutely, with butter, whiskey, and beef among the hardest-hit exports.

For Irish farmers, producers, and exporters, the prospect of these tariffs brings a sense of déjà vu. Similar policies in the past—such as U.S. tariffs on spirits—led to a dramatic drop in Scotch whisky exports, with losses exceeding £500 million over two years. Ireland could now face the same fate. This time, however, the stakes are even higher, as Kerrygold butter, premium whiskey brands, and high-quality Irish beef risk becoming too expensive for American consumers, threatening an industry that supports over 165,000 jobs across Ireland.

But this isn’t just an Irish issue, it’s a major concern for the wider European agricultural sector, which exported over €160 billion worth of agri-food products to the U.S. last year. Farmers across the EU are already dealing with rising production costs, sustainability regulations, and shifting market conditions, and these new tariffs could further destabilise an already fragile industry.

Trump’s Tariffs: A Policy Already in Motion

Trump’s tariff threats aren’t just words, they are already becoming reality. In early 2024, he reinstated tariffs on EU steel and aluminium, impacting European exports worth over €6.4 billion annually. Now, he’s setting his sights on the agri-food sector, and history suggests he won’t hesitate to follow through.

His motives are clear:

• Support U.S. Farmers: The U.S. dairy industry alone generates over $47 billion annually, and tariffs on EU dairy products would push American consumers towards local alternatives.
• Protect U.S. Industry: The U.S. beef market is worth $76 billion, and imports from Ireland, which account for around 6,000 tonnes annually, are seen as competition. By making Irish beef more expensive, the U.S. could encourage domestic sales.
• Gain Leverage in Trade Talks: Tariffs helped the U.S. secure better trade terms in the past, and Trump is likely using them again as bargaining chips for a broader trade deal.

The impact of previous tariffs on Scotch whisky provides a worrying precedent. When the U.S. imposed a 25% tariff on single malt Scotch whisky in 2019, exports to the U.S. plummeted by 34% in just one year, with a total decline of £500 million in sales over two years. The same fate could await Irish whiskey if these new tariffs go ahead, especially as American consumers look for cheaper alternatives.

The Impact on Irish Agriculture

Ireland’s agricultural sector is built on exports, with over 90% of food production sold to international markets, contributing €15 billion to the economy annually. The U.S. is a crucial part of this trade, particularly for premium products like butter, whiskey, and beef. A 25% tariff would make Irish goods significantly more expensive, leading to:

• Falling sales as American consumers opt for cheaper alternatives, potentially cutting Irish agri-food exports to the U.S. by hundreds of millions of euros.
• Financial strain on farmers and producers, as tariffs create uncertainty in long-term trade relationships.
• A knock-on effect for rural Ireland, where one in eight jobs depends on the agri-food industry.

Butter and Dairy:

Ireland’s grass-fed dairy industry is world-renowned, and Kerrygold butter has become a household name in the U.S. It’s now the second-best-selling butter brand in America, with annual sales exceeding €1 billion worldwide.

But a 25% tariff would drive up its price considerably, making it far less attractive to U.S. shoppers. With cheaper American butter brands already on the shelves, Kerrygold could see a sharp drop in sales. Irish dairy farmers, who produced over 8.7 billion litres of milk last year, could find themselves struggling to maintain profitability, especially as EU environmental regulations continue to put pressure on herd sizes.

Whiskey and Spirits:

The Irish whiskey industry has been booming, with global exports exceeding €1 billion annually. The U.S. is its biggest and fastest-growing market, accounting for 43% of total sales.

However, if Trump’s tariffs are enforced, this growth could grind to a halt. The previous U.S. tariffs on Scotch whisky cut exports by over a quarter in just 18 months, and a similar fate could await Irish brands. Smaller distilleries, which don’t have the financial muscle to absorb higher costs, could struggle to stay afloat, threatening an industry that supports over 14,000 jobs in Ireland.

Beef and Meat Exports:

Irish beef is widely regarded as some of the best in the world, thanks to its grass-fed, high-welfare production. The U.S. market has been a growing opportunity for Irish beef farmers, with exports reaching €50 million annually.

With a 25% price hike, Irish beef could be priced out of the American market. U.S. consumers would likely turn to cheaper, locally produced beef, leaving Irish farmers with fewer export opportunities and lower incomes. Given that over 55,000 Irish farmers are involved in beef production, the consequences could be far-reaching.

How Will the EU’s Agricultural Sector Be Affected?

Ireland may be at the frontline of these tariffs, but the entire EU agricultural sector will feel the shockwaves. The EU’s trade volume with the U.S. stands at around €1.4 trillion, making it one of the largest trade relationships in the world. If Trump follows through on his threats, the impact will be far-reaching:

• Major European food exports like wine, cheese, and cured meats could also face tariffs, hitting farmers across France, Italy, and Spain.
• The EU could retaliate with its own tariffs on U.S. goods, escalating the trade war and leading to even greater disruption.
• Smaller and medium-sized producers will struggle the most, as they lack the resources to absorb the extra costs.
• Central European economies that depend on exports to Germany could also experience indirect consequences, as a slowdown in EU trade affects supply chains.

The Human Impact: Rural Ireland at Risk

Beyond trade negotiations and export figures, it’s farmers, workers, and rural communities who will feel the real impact of these tariffs.

For a dairy farmer, falling Kerrygold sales mean lower milk prices, tighter margins, and tough choices—cut herd sizes, delay investments, or struggle to stay afloat. In whiskey distilling, smaller producers risk losing their biggest market, threatening not just distilleries but local farmers, coopers, and tourism businesses. For beef farmers, it’s another hit on top of Brexit, climate rules, and rising costs, making an already tough job even harder.

Irish agriculture has survived foot-and-mouth, Brexit, and EU policy shifts, but these tariffs could reshape its future. Some will adapt, others may not—leaving rural communities facing an uncertain road ahead.

What Can Ireland Do?

With tariffs looming, Ireland must act fast to protect its agri-food sector.

One solution is diversifying into new markets, such as Asia and the Middle East, to reduce reliance on the U.S. These regions offer growing demand, but breaking in takes time and investment.

Ireland must also push the EU to negotiate with the U.S., securing exemptions or reduced tariffs for key exports. Given the scale of EU-U.S. trade, Brussels has leverage—but Ireland must ensure its concerns are prioritised.

At home, the government needs to support affected farmers and producers, whether through financial aid, tax relief, or investment in new trade routes, to help businesses weather the storm.

Ireland has always punched above its weight in global trade, but Trump’s tariffs could be one of the toughest tests yet. The way Ireland responds now will shape its agricultural future.

Conclusion

Ireland’s agri-food sector stands at a crossroads. Will it weather yet another storm, or will Trump’s tariffs permanently alter its global position? If history has shown us anything, it’s that Irish farmers and producers are resilient—but resilience alone won’t be enough.

Can Ireland diversify quickly enough to make up for the potential loss of its biggest market? Can the EU negotiate a fair deal before lasting damage is done? Can the government step in to protect rural communities before jobs are lost?

The stakes couldn’t be higher—165,000 jobs, billions in exports, and generations of agricultural heritage are on the line. If these tariffs take effect, it won’t just be statistics on a trade report—it will be livelihoods lost, family farms at risk, and rural economies under pressure.

Ireland has overcome many challenges before, but this may be its toughest test yet. The decisions made now will shape the future of Irish agriculture for decades to come. Will Ireland rise to the challenge, or will it be left behind?

*By Anne Hayden MSc., Founder, The Informed Farmer Consultancy.