Trump takes aim at Kerrygold and whiskey in tariffs extending to €250m in Irish dairy exports to US
Business groups have reacted with horror as Irish dairy exports to the US worth €250m, including top-selling Kerrygold, became ensnared in the global trade wars, as the White House took aim at EU-made goods.
High-profile Irish brands such as Kerrygold, which is hugely popular in the US, cheese products, and some Irish whiskeys were added to the US sanctions list of EU goods, and now face prohibitive hikes in tariffs of 25% at the US border.
It came about as President Donald Trump's White House carried out an earlier threat after officially winning a ruling by the World Trade Organisation that EU member states had for years illegally funded Airbus, the continent's hugely successful rival to US plane maker Boeing.
Under WTO rules, the White House chose to slap tariffs on a huge range of products worth $7.5bn (€6.8bn) made in the EU, including British sweaters, French wine, and cheese from across the continent, as well as Irish dairy and whiskeys.
For Ireland, sanctions on Irish dairy products featured high on the list and will hit hard because the bulk of all EU butter exports to the US are from Ireland.
“Ireland will be one the biggest losers from a dairy perspective, as the US is one of our top export markets. Irish dairy exports to the US were worth over €250m in 2018," said Peter Fleming at the Irish Co-operative Organisation Society, or ICOS.
"The vast majority of these exports were of butter and cheddar cheese, both of which will be subject to this additional higher tariffs," he said.
Mr Fleming called on outgoing European Trade Commissioner Cecilia Malmstrom and incoming commissioner Phil Hogan to help to get a reprieve for Irish exports.
"Kerrygold butter is now the second-highest selling butter brand in the USA, and some other Irish exporters have entered the market in recent times," said Tom Phelan at the Irish Farmers' Association.
"These are high-value consumer products, and command a significant price premium on the market place, delivering strong margins to our sector,” Mr Phelan said.
"It is a very significant move by the WTO," said John Whelan, managing partner at trade adviser, The Linkage-Partnership.
"The implications are fairly widespread because the US is Ireland's largest trading partner," he said, and the details will be closely watched by many Irish exporters.
Economist Declan Jordan at UCC said the latest escalation in the trade wars by the US starkly showed the extent to which supply chains and markets were interlinked across the world.
President Trump and Brexiteers were taking "a simplistic" on the way trade flows worked which would, in the end, harm all countries, Mr Jordan said.
He said that the specific nature of the sanctions aimed at Irish dairy products suggested US business groups in Washington had championed the sanctions.
Independent economist Alan McQuaid said that Ireland faced more dangers should the EU-US dispute escalate further. "We are a very vulnerable trading economy," he said.
The Irish Exporters Association had earlier this week said it was concerned by US threats to place tariffs on important Irish exports such as Irish whiskey and agricultural goods.
And business group Ibec which had called on the EU-US to cool the tensions said that the timing of the WTO ruling was unfortunate given the threat Ireland faces from a hard Brexit.
In a new joint statement with business group CBI Northern Ireland, Ibec said that the "natural economic zone" of the all-Ireland economy was threatened by Brexit.
