With the trade deal between the EU and the US under pressure amidst threats of new tariffs from the US and counter-threats from the EU, what advice in terms of options and solutions open for businesses trying to navigate the uncertainties do you have?
Contributor: Carol Lynch, Partner, Head of Customs and International Trade, BDO
The last year has been a very challenging time for businesses with trade disputes and the introduction of new US tariffs being an almost constant feature. A particular challenge in this regard for Irish Exporters was the constant amendment and changes to the application of tariffs on steel products and derivatives being imported into the US.
Alongside this there have also been misgivings aired by many in the European Parliament about the EU-US deal agreed last year ( the Turnberry agreement). Finally however, in the early hours of Wednesday 20th May the European Parliament and Member States reached a compromise agreement which should enable the Turnberry agreement (agreed last summer) to enter into force. It is expected that this will pave the way for enactment late June, and before the Trump deadline of 4th July (where he has threatened to impose further tariffs if the deal is not in place).
A new input into the agreement by the Parliament however allows the Commission to suspend the implementation of the preferential tariff rates for US imports if the Trump Administration fails to remove steel and aluminium tariffs above 15% by the end of 2026. If successful this will be welcome news for exporters. Along with this a “sunset clause” has been introduced which will allow the deal to expire on 31 December 2029.
Even with this deal finally legally coming into force this is unlikely to eliminate uncertainty and cost pressures . There continues to be uncertainty over the legality of both new US tariffs under section 122 and 301 respectively, for example there has been successful challenges to the current Section 122 tariffs (balance of payments) following the invalidation of the previous IEEPA tariffs by the courts.
As a result, there is likely to be increased uncertainty over the next few months for businesses which makes planning ahead and pricing extremely difficult for exporters. Therefore, we propose a series of recommendations to help businesses navigate this complex business environment:
Cost and tariff analysis should be a priority. Businesses need to assess how different tariff scenarios impact margins and competitiveness, and in many cases, adopt pricing strategies that assume elevated tariffs will continue. Critical steps include ensuring accurate tariff classification of products, confirming origin rules, and—where relevant—understanding requirements such as the “melt and pour” origin rules for steel. Businesses should also explore whether any reliefs apply, such as for US origin goods returning, and review intercompany pricing arrangements to ensure duties are calculated on optimised, compliant values.
Diversification is equally important. Companies should examine opportunities to expand into alternative markets, particularly those covered by EU free trade agreements, where tariffs may be reduced or eliminated. Recent agreements with regions such as Mercosur, India, and Australia highlight the EU’s continued commitment to facilitating trade despite a more protectionist global landscape.
Finally, businesses should leverage available supports. Irish companies may be eligible for funding through Enterprise Ireland, including grants for market research and development of new export strategies. These supports can help offset the costs of analysing tariff exposure and entering new markets.
Content published in Finance Dublin Irish Tax Monitor.