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US to target key Irish food and drink brands with 25% tariff

Kerrygold and Baileys affected: US to tax EU imports following WTO ruling

The tariffs on butter will likely hit Kerrygold, which is the second-most popular butter brand in the United States. More than 34,000 tonnes of the Irish product was exported there in 2018. File photograph: Getty

Irish food and beverage products including Kerrygold and Baileys are to be hit by a new 25 per cent tariff by the United States.

The Trump administration unveiled plans to tax EU imports following a WTO ruling on Wednesday.

In a blow to Irish and European food exporters, the Office of the US Trade Representative announced it would impose tariffs of 25 per cent on a range of food products including butter, cheese, pork and several drink products, including liqueurs such as Baileys.

However, while whiskey from Scotland and Northern Ireland – including Bushmills – will be hit, it appears that Irish whiskey has been exempted from the tariffs.

The decision was announced hours after the United States was given the green light to impose $7.5 billion (€6.84 billion) worth of tariffs on European exports.

The Geneva-based WTO issued its judgment in the long-running trade dispute, ruling that the United States could impose trade measures worth up to $7.5 billion over what it has said are unfair subsidies given to Airbus.

It marks the largest ever ruling by the international trade body.

The apparent tariff exemption for whiskey from the Republic of Ireland will be welcomed, given that the US is Ireland’s primary export market for whiskey. File photograph: Getty

Ireland’s butter and liqueur exporters will be among the businesses affected by the ruling, with the new tariffs due to come into effect on October 18th.

Apparent exemption

However, the apparent exemption for whiskey from the Republic of Ireland will be welcomed, given that the US is Ireland’s primary export market for whiskey.

The tariffs on butter will likely hit Kerrygold, which is the second-most popular butter brand in the United States. More than 34,000 tonnes of the Irish product was exported there in 2018.

An analysis by Ibec earlier this year found that Irish goods would be the most exposed, on a per capita basis, to the proposed US tariffs on EU goods, noting that €818 million worth of products would be hit. “Given that the food and drink sector makes up two-thirds of the exports of indigenous firms, there is potential here for significant knock-on impacts on the domestic economy,” the association writes in its most recent economic outlook.

‘Big win’

Speaking at a press conference in the White House on Wednesday, President Donald Trump said that the WTO ruling was a “big win for the United States”.

“The WTO has been much better to us since I’ve been president because they understand they can’t get away with what they’ve been getting away with for so many years, which is ripping off the United States,” he said of the decades-long dispute.

The WTO is due to rule on a parallel case brought by the EU against US support for Boeing early next year. The EU has warned that it will be forced to retaliate over the new tariffs.

Incoming EU trade commissioner Phil Hogan said during his confirmation hearing in Brussels this week that Europe “has to stand up for itself” and should identify American products that could be hit in retaliatory action if the US imposed the sanctions.