From 12 March 2025, the US has said that it will apply a 25% tariff to all steel and aluminium imports, ending earlier deals which allowed tariff-free access to the US market for EU and UK steel and aluminium exports.

While much remains uncertain, it appears that tariffs will be at the heart of the Trump administration’s response to trade that it perceives as unfair. Further US tariffs on EU and UK goods are possible.

Under the UK’s post-Brexit settlement with the EU, Northern Ireland remains part of the UK’s customs territory, but has to apply EU customs and other goods-related laws. This arrangement, now referred to as the Windsor Framework, means there is no ‘hard’ border on the island of Ireland and no customs or regulatory controls on goods moving between Northern Ireland and the Republic of Ireland, which is part of the EU’s customs territory.

If the US targets EU goods for further tariffs while sparing the UK, differences in the tariff rates applied to EU and UK goods may have important implications for Northern Ireland.

How might the EU respond to further US tariffs?

More tariffs on a wider range of goods are expected to be announced in early April under President Trump’s ‘Fair and Reciprocal Plan’, which is intended to make trade ‘more reciprocal and balanced’ and reduce the US’s trade deficit. The EU has an overall trade surplus in goods with the US. President Trump has already indicated that all EU goods could face a 25% tariff.

The EU’s response has been forthright, with the European Commission President, Ursula von der Leyen, saying: “Unjustified tariffs on the EU will not go unanswered – they will trigger firm and proportionate countermeasures”. Retaliatory tariffs are one such potential countermeasure.

Goods targeted by retaliatory tariffs may be strategically chosen to have maximum political effect. In a previous trade dispute with the US in 2018, the EU (which then included the UK) imposed tariffs on distinctive US brands such as Harley-Davidson motorcycles, Levi jeans and Bourbon whiskey. The EU suspended these tariffs in 2022 after reaching a deal with the US to restore tariff-free access to the US market for EU steel and aluminium exports, up to an agreed quota. The UK agreed a similar deal with the US.

The EU tariff suspension ends on 31 March 2025. Without further action by the EU to extend it, the 2018 tariffs on US goods will apply automatically from 1 April 2025.

The EU may decide to apply further tariffs if the US targets more EU goods under its ‘Fair and Reciprocal Plan’. This will take time, as the EU cannot act by executive decree. It will need to follow the procedures set out in EU laws, which allow it to apply trade defence measures.

How might the UK respond to further US tariffs?

The UK Government has not said how it would respond to further US tariffs. It hopes to secure a new economic deal with the US that might avert the risk of tariffs, encouraged by  US trade data which shows that the UK has a deficit in trade in goods with the US. Achieving a deal will not be easy. The UK calculates its trade data differently to the US. The UK’s data shows that the UK has an overall trade surplus in goods with the US, though it is smaller than the EU’s goods trade surplus with the US.

The Prime Minister wants to steer a middle course between the EU and the US, and has said that ‘we will never choose between either side of the Atlantic’. The UK may therefore be reluctant to follow the EU if it decides to apply retaliatory tariffs on the US, especially while the possibility of a deal with the US remains open.

What are the current customs arrangements in Northern Ireland?

Under the Windsor Framework, goods produced in Northern Ireland have unrestricted access to the EU single market and (with minor exceptions) to the UK internal market.

This is not the case for goods entering Northern Ireland from outside the EU (including from other parts of the UK). These goods are treated as ‘at risk’ of being moved into the EU single market. EU tariffs generally apply to these ‘at risk’ goods, where the EU tariff is higher than the equivalent UK tariff. There are exceptions for traders who participate in the UK Internal Market Scheme and comply with conditions intended to ensure that their goods will only be used or consumed in Northern Ireland. These goods are generally considered ‘not at risk’ of entering the EU single market and the UK tariff will apply.

What would US tariffs on EU goods mean for exports from Northern Ireland to the US?

Northern Ireland goods exported to the US are unlikely to be directly affected by tariffs applied only to EU goods.

As Northern Ireland remains part of the UK’s customs territory, goods produced in Northern Ireland are generally treated as UK goods when exported to countries outside the EU, and will be subject to any tariff the US applies to UK goods.

However, US customs authorities may decide to step up checks at their border if they suspect that goods originating in the EU may be routed through Northern Ireland to avoid a higher tariff on EU goods. This could cause delays, uncertainty and additional administrative burdens for legitimate exporters in Northern Ireland.

What would retaliatory EU tariffs on US goods mean for Northern Ireland?

Under the Windsor Framework, all classes of goods that are subject to EU retaliatory tariffs and are brought into Northern Ireland from outside the EU (including from another part of the UK) are treated as ‘at risk’ of entering the EU single market. This includes goods moved under the UK’s Internal Market Scheme.

The EU tariff will generally apply to these goods if it is higher than the equivalent UK tariff. Businesses in Northern Ireland can recover the tariff paid on goods which they can show have not ended up in the EU. They will need to weigh the cost of making a claim under the UK’s Duty Reimbursement Scheme against the amount they can recover. In many cases, extra costs may be passed on to Northern Ireland consumers.

About the author: Leigh Gibson is a senior EU policy specialist, working for the Parliament, Public Administration and Constitution Hub.

Photo by: Maciej via Adobe Stock

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