Dairy industry in the firing line as Trump threatens tariffs on €9.7 billion of EU imports
The Irish dairy industry could be collateral damage in a rapidly escalating trade dispute between the US and the EU.
US President Donald Trump has said he will put tariffs on $11 billion (€9.77 billion) worth of European Union dairy products, wine and other goods to retaliate for what Washington says are improper subsidies to Airbus.
The office of the US trade representative released a preliminary list of EU goods facing additional duties that includes everything from aircraft and aircraft parts to cheese, wine and olives.
The list is subject to public comment in anticipation of an expected World Trade Organisation (WTO) ruling this summer that would be favourable to the US in a pending arbitration case.
The US says the WTO has repeatedly found that EU subsidies to European aircraft maker Airbus have caused “adverse effects” to the US, chiefly to Boeing, the American plane manufacturer.
The World Trade Organization finds that the European Union subsidies to Airbus has adversely impacted the United States, which will now put Tariffs on $11 Billion of EU products! The EU has taken advantage of the U.S. on trade for many years. It will soon stop!
— Donald J. Trump (@realDonaldTrump) April 9, 2019
Mr Trump, a critic of the WTO, tweeted that he “will now put Tariffs on $11 Billion of EU products! The EU has taken advantage of the U.S. on trade for many years. It will soon stop!”
The long-running dispute precedes the Trump administration.
Ireland produced more dairy products and exported more volume in 2018 than in any previous year.
According to Bord Bia, the North American market grew by 36pc to €366m in 2018. This was driven by growth in the US economy. Butter exports to the US increased by 90pc to €161m while the value of cheese exports to the US grew by 20pc last year.
The Irish dairy sector is already facing steep tariffs under the UK proposed no-deal plans which would also Irish dairy to full international competition in the UK market from other dairy giants such as New Zealand and the USA.
Dairy Industry Ireland has said the UK’s proposed tariff of €221 a tonne on cheddar- will result in a possible over €20m per year in a tariff cost for Irish cheddar.
But related factors such as customs costs, currency issues and an increase of international competition mean that the final bill for industry and farmers will be a multiple of this.
The roughly €22m proposed tariff on Irish butter would be similarly multiplied with a €605/t tariff slapped on initially but with a range of other costs inflating that figure.