After temporarily shelving his tariff plans against Canada and Mexico, US President Donald Trump plans tariffs on Europe, setting the stage for a potential transatlantic trade war.
In a statement on Monday evening, Mr Trump criticised the current US-EU trade
balance, calling it an “atrocity” and claiming that Europe has “taken advantage” of the United States. He specifically pointed to the EU’s restrictions on US car and farm product imports while the US continues to accept a wide range of European goods.
Tariffs “Definitely Happening” on EU Imports
While phone calls between Mr Trump and leaders of Canada and Mexico resulted in a last-minute halt to planned 25% tariffs on their exports, the president made it clear that the EU would not be given the same leniency.
“It is an atrocity what they have done. It’s a $350bn deficit, so obviously something is going to take place there,” he said, reiterating his stance that tariffs on European imports are inevitable.
The EU remains the US’s largest trading partner, with Eurostat reporting that nearly 20% of total EU exports went to the US in 2023. With a strong emphasis on food and agriculture in Mr Trump’s rhetoric, countries like Ireland, which exports high-value food products to the US, could be among the hardest hit.
Irish Exports Under Threat
Ireland’s key exports to the US include Kerrygold butter, Jameson whiskey, and dairy products, all of which could face steep tariffs if Mr Trump follows through on his threats.
According to the Central Statistics Office (CSO), Ireland exported more than €67.4bn worth of goods to the US in the first 11 months of 2024, while imports from the US to Ireland stood at just €20.7bn during the same period.
- Food and live animal exports to the US: €885m
- Beverages and tobacco exports to the US: €816m
- Food and live animal imports from the US: €341m
- Beverages and tobacco imports from the US: €155m
These figures underscore Ireland’s significant trade surplus with the US, which could make its exports a prime target for tariffs.
Economic Risks of a US-EU Trade War
Economists warn that Mr Trump’s tariff policies could destabilise global supply chains and lead to increased costs for consumers on both sides of the Atlantic. Protectionist trade measures often drive up prices, adding to inflationary pressures at a time when both the US and the EU are already battling economic uncertainty.
Mr Trump has long viewed tariffs as a way to boost US government revenue while pushing for tax cuts elsewhere. However, with his Canada and Mexico tariffs paused, he may feel increasing pressure to enforce trade penalties against the EU to achieve his economic objectives.
If the EU retaliates with counter-tariffs, a full-scale trade war could emerge, impacting European industries, global markets, and consumer prices worldwide.
