What Is the Current Situation?

The current situation with respect to US tariffs is evolving on a weekly basis and is subject to change. What we know so far is that the US administration’s 10% tariff on all Chinese goods became effective at the start of February, but was subsequently amended by Executive Order on 3 March 2025, increasing the tariff rate from 10% to 20% from 4 March 2025. Furthermore, as of 4 March 2025, an ad valorem tariff rate of 25% has been applied to all Canadian products, except for energy or energy resources (which definition is extensive, and includes crude oil, natural gas, refined petroleum products, uranium, coal, biofuels, geothermal heat, and critical minerals), which are subject to an ad valorem rate of duty of 10%.

As of the same date, this 25% tariff was also applied to all Mexican goods. From 12 March 2025, 25% tariffs were imposed on all aluminium, steel and both aluminium and steel derivatives imports into the US. These tariffs apply irrespective of exporting country, with the exception of Russia, as the US has not altered its 200% tariff on Russian aluminium imports which was first imposed in 2023.

The next steps in the US administration’s tariff plan are rapidly emerging with the President outlining his intention, at recent news conferences, to impose a 25% tariff on auto imports potentially as soon as April 2025 and suggesting that similar or higher tariffs on pharmaceuticals and semiconductors can be expected.  Indeed, the Executive Office of the President published a memorandum in February outlining the US presidential plan to introduce the ‘Fair and Reciprocal Plan’ to counter non-reciprocal trading with US trading partners.

The US system requires the importer of record to pay the relevant tariffs. This means that US importers, rather than exporters, are most heavily impacted. Industry practice is for the importer to pass tariff costs onto American consumers, the importer’s reimbursement deriving directly or indirectly through an increased product price.

Unlike previous administrations, the new US Administration is utilising the International Emergency Economic Powers Act (“IEEPA”) in conjunction with the National Emergency Act, 1976 and the Trade Act, 1974, to impose these tariffs. The IEEPA, in particular, grants broad powers to regulate economic policy upon the declaration of a national emergency and is more often used to impose economic sanctions.

Who Will be Impacted?

Given the changeable manner in which the US tariff policy has been enacted to date, it is difficult to anticipate the likelihood of the imposition of EU-wide tariffs.  The recently imposed tariffs nonetheless raise concerns regarding the potential impact of this trade strategy on the Irish, European, and indeed, global economy. The importance for Ireland of the Irish-US trading relationship is reflected in the value of Irish goods exported to the US in 2024, which figure reached 72.6 billion euro. This contrasts with the import of US goods into Ireland, the value of which amounted to 22.5 billion euro in 2024, reflecting an annual decrease of 2%. Indeed, if additional tariffs are imposed, it is possible that companies based in Ireland with large export operations would be subject to increased costs, potentially creating a barrier to entry and expansion in US markets.

While the potential impact of US tariffs merits due consideration, the European reaction to these tariffs is equally as important and impactful and will seemingly involve countermeasures that further influence global trade dynamics and business operations The European Commission has reinforced, in its statements on the unfolding US reciprocal tariff policy, the open nature of the EU’s economy, with over 70% of imports entering the EU at zero tariff. However, in response to the US tariffs on steel and aluminium imports, the Commission has announced its two-pronged response.

• In the first instance, the previously suspended countermeasures against the US that were in place in 2018 and 2020, will be allowed to resume taking effect immediately on 1 April 2025 and applying to a broad range of products. These countermeasures were implemented in response to the steel and aluminium tariffs imposed during the first US administration under the current President and were suspended until 31 March 2025 on the basis of concessions by both sides and to allow the parties to negotiate a long-term solution.
• Secondly, the Commission has outlined that it is putting forward a package of new countermeasures which could apply to US goods exports worth up to 26 billion euro and which may be in force by mid-April, following consultation with Member States. The Commission is enacting these new measures under the EU Enforcement Regulation (Regulation 654/2014), meaning the Commission considers the US tariffs to be a ‘safeguard measure’, in relation to which the Union can seek to rebalance its tariffs concessions and other trade benefits which it had applied in its trade with the US.

The Commission has nonetheless maintained that it is ready to work with the US administration to negotiate a solution which may lead to the reversal of the EU’s countermeasures.

Strategic Assessment and Preparedness

Strategic readiness is essential to lessening the impact of any unforeseen economic policies. All Irish companies with US exports, particularly those in the life sciences and technology sectors, should establish the appropriate internal review frameworks to minimise any anticipated business interruption and facilitate the effectual continuation of trade.

Companies should consider the following actions:

• Supply chain review: The impact of tariffs on the cost and availability of raw materials, including that of components essential to pharmaceuticals, medical devices, semiconductors and other products, is apparent. Companies should comprehensively review their supply chains ahead of time, to identify potential alternatives and minimise reliance upon affected resources.  Conducting gaps analyses and developing a resilient supply chain, should be a core operational goal of companies operating in this space.
• Legislative and Regulatory Monitoring / Knowledge: Keep track of developments in this space.
• Establish a Compliance Team: With the potential for international trade obligations to alter significantly in the coming period, companies should consider both establishing an internal team and liaising with external advisors, with respect to their legal responsibilities, compliance and strategy.
• Contracts review: Supply chain operators should review and evaluate their contractual obligations with respect to tariff payments and liability.

As Ireland continues to play host to major exports-based companies, including multinational pharmaceutical and technology companies, it is crucial for industry stakeholders to remain informed about legal updates in the market and to keep a watchful eye on the shifting geopolitical landscape.

For further information, please contact the Competition and Regulated Markets Group

Thanks to Eva Glynn for her assistance with this briefing.