Ireland is “by far the most exposed” among European countries to proposed US tariffs given the high volume of whiskey we export to the country, a leading economist has said.
On Monday, the US trade representative set out a series of tariffs on goods including meats, cheeses, olives, coffee and, most worryingly for the State, “Irish and Scotch whiskies”.
According to Ibec chief economist Gerard Brady, that last category makes up the biggest proportion of exports by the 28 European Union countries to be affected, accounting for more than €1.6 billion out of a total of €4.4 billion.
In the Republic alone, about €400 million worth of exports are covered under the US list, he said.
The Republic, he said, is the country most exposed by the latest threatened tariffs on a per capita basis, with €88.30 of exports per person under threat. Second on the list was Denmark, for which €27.80 of exports per person are under threat. The Irish exposure is driven primarily by whiskey, which comprises 85 per cent of total goods under threat. Some dairy products would also fall under the US tariff regime.
“If you look at the overall impact of these tariffs on the Irish economy it’s tiny, but if you look at specific sectors hit, it’s a huge chunk of their overall exports,” Mr Brady said.
Aircraft subsidies
The supplemental list of products that could potentially be subject to additional duties were set out by the US office of the trade representative in response to what it alleged was the “harm caused by EU aircraft subsidies”.
Mr Brady said the proposed tariffs were “targeted”. “Six countries from the EU 28 make up 80 per cent of the exports under threat,” he said. These are the UK, Italy, Germany, Ireland, Spain, and France.
As with Ireland, the UK’s major exposure comes from Scottish whisky. Italian and French exposure comes from the volume of cheese they export, while Spain’s cured ham exports are under threat from the proposed tariffs.
The EU said on Tuesday that it was open to talks with Washington in a dispute over the aircraft subsidies. It also noted the dispute should be adjudicated by the World Trade Organisation (WTO) and that the US was not entitled to make its own tally of potential hurt to calculate retaliation.
“The figures quoted by the USTR [US trade representative] are based on US internal estimates that have not been awarded by the WTO,” a spokesman for the EU executive said in an email.
The EU said it remained open to negotiations “provided these are without preconditions and aim at a fair outcome”. But it added that it was also preparing to retaliate as soon as the WTO arbitrator had ruled on its rights to do so.
An industry group which stands to suffer criticised the latest list of potential tariffs.
“The Irish whiskey industry opposes the imposition of tariffs, which harms distillers and businesses both in Ireland and in the US,” the Irish Whiskey Association said in a statement.
“Any tariffs imposed on Irish whiskey entering the US market will negatively impact investment and employment in both jurisdictions. We urge both sides to continue to strive to achieve a mutually acceptable solution to this issue and to avoid imposing barriers to trade which will ultimately adversely impact businesses and consumers on both sides of the Atlantic.”
