What we feared the most from President Trump is now very likely to happen. He has promised that he will put a 25% tariff on EU goods entering the US, which will include Ireland. As he said at a press conference on 3rd Feb. regarding tariffs “ . . it will definitely happen with the European Union, I can tell you that.”
U.S. tariffs on agricultural machinery could significantly impact Irish agricultural machinery dealers and distributors. Even though we might not be regarded internationally as a producer of agricultural machinery, there are still several companies in Ireland who manufacture agricultural equipment and export all over the world, including into the US. Any tariffs put on exports to the US will be felt by these companies.
If the U.S. increases tariffs on agricultural machinery from countries like Ireland, it could increase the costs for Irish manufacturers or distributors who export machinery to the U.S. Tariffs will raise the price of these goods in the U.S. market, making them less competitive compared to similar equipment that is manufactured in the US.
For Irish dealers and distributors, this could mean fewer sales in the U.S. market, as the higher prices could deter American farmers and agricultural businesses from purchasing Irish made machinery. Smaller Irish businesses may be hit harder, as they may lack the resources or scale to absorb the additional costs and could be forced to pass them on to their US customers, which, potentially could lose them market share. This could have ripple effects on Irish manufacturers, who may face reduced demand for their products in the US resulting in lower revenue.
What will the likely response be from Europe? If the EU imposes similar tariffs on US goods entering Europe it will make American agricultural machinery that bit more expensive. If that is the case then it could make European or locally manufactured machinery more attractive to Irish customers. Dealers might see an increase in demand for products they import from other countries within the European Union, which could help cancel out the effects of US tariffs.
If he is invited, this day next month, should see Taoiseach, Micheál Martin visit the White House on St. Patrick’s Day for the traditional handing over of the bowl of shamrock. He should make the most of this opportunity to see if he can do a deal with Donald Trump on Irish exports, which includes our agricultural machinery manufacturing companies. It will take a lot of ‘Luck of the Irish’ to pull off a deal that would make Ireland exempt from these possible European tariffs. This is extremely unlikely, given that American technology and pharmaceutical companies based in Ireland are making huge profits that benefit the Irish exchequer. Donald Trump knows this and wants a slice of those profits.
Hopefully, as was the case with Mexico and Canada, tariffs on European exports to the US may be avoided through lengthy negotiations. We should prepare for the worst but hope for the best. The long-term consequences on US tariffs will depend on the ability of Irish companies to adapt to changing trade conditions, manage costs, and find new markets. We’ll keep our fingers crossed.
