As US President Donald Trump presses ahead with his tariff-led trade policy, John O'Loughlin considers the Irish, UK and EU response and offers his advice to businesses on managing the risks
On Monday, 10 February, President Trump signed a proclamation imposing a 25 percent tariff on all steel and aluminium imports, irrespective of the country of origin, due to be implemented on 12 March.
While tariffs had already been in place for both steel and aluminium, certain countries, including the UK and countries in the European Union (EU), were previously exempted.
The introduction of Trump’s new policy measures will now see the 25 percent tariff apply to all third countries, including those in the EU.
Additionally, on Thursday, 13 February, President Trump signed a Presidential Memorandum introducing the “Fair and Reciprocal Plan”.
This plan instructs the Trump Administration to investigate and produce a report detailing proposed remedies to counter non-reciprocal trading arrangements with trading partners.
In the context of this memorandum, the potential introduction of “reciprocal tariffs” would see the US apply tariffs to third country goods matching the tariffs those countries impose on US goods.
For example, the White House Fact Sheet accompanying this memorandum specifically highlighted the disparity between the 10 percent tariff imposed by the EU on imported cars, compared to the US tariff of 2.5 percent.
Irish reaction
In response to the implementation of US tariff measures on China, and the threat of further tariffs being imposed in the EU, the Irish Government has proposed two new advisory bodies.
The Strategic Economic Advisory Panel would be based in the US and specifically tasked with strengthening US-Irish relations and advising on how to address potential policy changes introduced by the Trump administration.
The plan is that the panel would comprise influential professionals drawn from a range of business sectors operating in the US.
The second proposed body is the Consultative Group on International Trade Policy, which would facilitate dialogue with key stakeholders in international trade. This group would meet at least once every eight weeks, providing guidance on addressing trade challenges and opportunities.
EU commentary
European leaders have expressed concerns about President Trump’s recent tariff threats, warning of potential economic harm to EU member states.
Spain’s Economy Minister Carlos Cuerpo stressed the need for a united EU response to protect businesses and ensure fair competition.
At a recent summit, European Commission President Ursula von der Leyen acknowledged the growing uncertainty surrounding US trade tariffs and affirmed the bloc’s readiness to defend itself.
“When targeted unfairly or arbitrarily, the European Union will respond firmly,” von der Leyen stated.
Discussions also focused on maintaining transatlantic unity while seeking diplomatic solutions to prevent escalating trade tensions.
French Foreign Minister Jean-Noël Barrot urged the European Commission to take decisive action, arguing that the EU must be prepared to implement retaliatory measures if necessary.
His position reflects a broader consensus among EU leaders to stand firm against unwarranted economic actions that could harm European businesses and consumers.
More recently, on 10 February 2025, the EU Commission issued an official statement regarding potential US tariffs on EU-sourced steel and aluminium.
The Commission emphasised that it would not respond to any announcements without written clarification and reiterated that it sees no justification for imposing tariffs on its exports.
Echoing the sentiments of the foreign ministers of EU member states, the Commission affirmed that any future actions would aim to protect the interests of European businesses, workers and consumers against unjustified measures.
UK position
In contrast to the EU, President Trump has made generally positive comments relating to the UK, suggesting that potential UK tariffs could be “worked out”. This has resulted in a subdued response from the UK, with no clear signs that a trade war could break out between the two nations.
Preparing for the future
Since the inauguration of President Trump, we have seen increased engagement from businesses on the tariff issue, motivated by a desire to understand the practical implications of these changes and how they might impact business performance.
To determine this potential impact, companies should take the following steps:
- Assess the customs origin of goods shipped to the US to determine exposure to potential tariffs.
- Gain oversight of the end-to-end supply chain, gathering the right data to assess the impact on material sourcing and tariff exposure for component parts.
- Understand how tariffs might impact software/service business due to reduced demand from existing customers.
- Assess the legal structure of the business and how transfer pricing arrangements could be used to mitigate tariff impact.
John O'Loughlin is Partner of Global Trade and Customs at PwC Ireland
LOADING...