EU-US Trade Agreement: What Irish businesses need to know now

The framework trade agreement reached between the EU and US on Sunday evening has dominated the news in recent days. For those doing business with the US, the agreement will have significant ramifications which they will need to consider urgently, together with the actions that they should take in response.

What’s in the deal?

While much of the detail is yet to be confirmed, the key points to emerge so far are:

• A headline tariff of 15% to apply to exports of goods of EU origin to the US. It appears that this tariff will cover approximately 70% of EU to US exports of goods by value.
• Importantly this tariff is expected to be an ‘all-in’ rate and not stacked on top of existing tariffs, in contrast with the temporary additional 10% tariff announced in early April.
• There are some exceptions, notably steel and aluminium which will be subject to a tariff of 50%, though there may a quota based on historic import levels at which this increased tariff will kick in. Precise details are still to follow and it is worth noting that the matter of steel tariffs has not yet been fully resolved in the context of the UK/US trade agreement signed in mid-May 2025.
• On the other hand, there are also carve-outs for products on which zero tariffs will apply. These include all aircraft and component parts (critical for Ireland) as well as certain generic drugs and some chemicals. However, it is not yet clear if alcoholic beverages (another key Irish sector) will be subject to a zero rate. For the Irish whiskey industry in particular, this is critical as Scotch whisky is currently subject to a 10% rate under the terms of the UK/US trade agreement.
• There is some uncertainty regarding the position of pharmaceuticals and semiconductor chips, two key areas for the Irish economy. It appears that they will continue to be exempt from tariffs pending the outcome of an investigation under Section 232 of the (US) Trade Expansion Act 1962 and that any tariff introduced at that stage will not exceed 15%. President Trump has however indicated that further measures may be taken with a view to encouraging the reshoring of pharma production to the US; it is unclear if these will be tariff or non-tariff measures.
• The EU for their part will not implement any of the retaliatory measures that were due to kick in on 7 August 2025 and have agreed to reduce tariffs in a number of areas.
• The agreement also commits EU businesses to endeavour to invest US$600billion into the US economy while the EU commits to purchases of certain US energy products and armaments.

Challenges for Irish exporting businesses

There are still therefore a number of uncertainties, but the risk of an EU/US trade war should recede, something business will welcome. For businesses that currently export goods to the US, or are considering doing so, the following steps should be taken:

• Categorisation of goods: While the application of a single tariff rate to most products should simplify this process, it is important that any goods that may be subject to special rates or part of the carve-outs are carefully considered.
• Origin of goods: This is key as what will ultimately determine the tariff rate is not necessarily where the goods are dispatched from but where they originate from. It is important to note that the US is currently looking to apply revised tariff rates to most trading partners and the EU/US agreement might not be the only one of relevance to a business. Generally, in the case of exports to US, the place of last significant transformation is key. A particular challenge for Irish businesses – especially sectors such as agrifoods where ingredients are sourced on both sides of the border – is the different tariff applicable north and south of the Irish border, as the UK/US agreement provides for a general 10% rate.
• Pricing: The pricing of the product will have to be carefully considered and a robust methodology put in place to reduce the risk of customs disputes. In some cases, a business may also have to consider transfer pricing for corporation tax purposes and there may be a tension between transfer pricing and customs pricing.

Commercial implications

Exporting businesses should also consider the commercial impact of these tariffs on their business and pricing models and on their supply chains. Conversations with suppliers, customers and intermediaries should already be underway and should now be advanced to the next level as some clarity comes into view. In some cases, consideration may have to be given to whether it is viable to continue supplying the US market.

It is also important not to overlook other factors such as currency movements, which can have a significant impact on margins. Finally, it is important to be aware that in addition to these trade measures, the US tax system is undergoing significant change currently and, for example, Crowe are increasingly fielding queries from clients on matters such as the recently enacted One Big Beautiful Bill Act.

Our experienced tax team are on hand to help you with any issues that may arise. Should you have any queries, please do not hesitate to get in touch with a member of our tax department.