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US PRESIDENT DONALD Trump launched a global tariff increase on 5 April, targeting over 57 different countries that are active exporters of goods into the United States.
The move represents a significant shift in US trade policy, with implications for economies around the globe, including Ireland, whose industries, as an island nation, are deeply embedded in international supply chains.
Last year, total Irish exports to the United States were valued at approximately €72.6 billion. Of this, about €58 billion is attributable to the pharmaceutical and chemical industries.
Meanwhile, food exports to the USA and North America rose by 14% in 2024 to a total of €2 billion, according to Bord Bia. These figures highlight the scale of Ireland’s economic interdependence with the US, a partnership that is now being tested by tariffs.
The first phase of Trump’s tariffs hit food exports, with a 20% additional tariff applied across European Union partners. Irish food products, known for their quality, now face sharp price increases. For example, the cost of a pound of Irish butter could reach $11.
While this may not deter loyal diaspora consumers, overall demand may decline due to the product’s elastic nature. This means that significant price increases could lead to a noticeable drop in consumption among more price-sensitive buyers.
Perishable goods are particularly vulnerable. Delays in US import inspections, reminiscent of early Brexit fears, could lead to local oversupply and product spoilage. There is even a risk of revisiting the ‘butter mountains’ of the past, where stockpiles of surplus goods suppressed market prices within the EU.
Tariffs on pharmaceutical and chemical products, which were expected to be announced on 9 April, are envisaged to have an even more substantial impact. These products are considered typically inelastic, with demand unlikely to fall significantly.
However, supply chain disruptions could result in drug shortages and regulatory delays. Although many pharmaceutical products have a longer shelf-life than food, expiration dates and compliance with FDA standards remain pressing concerns.
A closer look at recent data from the US Census Bureau (2024) reveals that the US maintains a trade deficit with Ireland, importing significantly more from Ireland than it exports. This is largely driven by high-value sectors such as pharmaceuticals, medical devices and tech products.
Much of this success is due to US multinationals like Pfizer, Apple and Amgen operating out of Ireland and re-exporting goods to the US Ireland’s role as a top contributor to the US goods trade deficit highlights just how strategically important this trading relationship is, particularly considering Trump’s tariffs.
The complexity of modern supply chains is often overlooked, with media coverage often portraying international trade as a simple transaction, for example, as an EU car sold to the US, or a US aircraft shipped to Europe. The global economy, however, is powered by complex supply chains of raw materials, components, work-in-progress assemblies and systems that cross multiple borders before a finished product reaches consumers.
These supply chains could also include reverse movements, such as the return of goods, recycling, and disposal of waste, which add another layer of complexity and logistical coordination. These interconnected supply networks mean that tariffs applied at one point can reverberate throughout entire industries, causing delays, cost increases and logistical challenges across regions.
Digitial trade, though less directly impacted by tariffs, could still face disruption through regulatory divergence, uncertainty in data transfer agreements and reduced business confidence. While there have been discussions in the EU about potential retaliatory measures targeting US digital services, Irish officials have emphasised that such moves would be economically damaging given Ireland’s role as a major hub for US tech companies. Nonetheless, even speculative threats can increase uncertainty for firms and investors in the digital economy.
Small and medium-sized enterprises (SMEs), which lack the scale and financial buffers of multinationals, are likely to be hit hardest by increased tariffs. Unlike larger firms, SMEs often have limited capacity to absorb cost hikes, diversify markets quickly, or handle complex customs procedures, making them particularly vulnerable to trade disruptions.
For example, Irish whiskey maker Clonakilty, facing a 20% duty under Trump’s tariffs, has already pivoted its export focus towards Asia and the UK to maintain competitiveness. Anecdotally, some firms have had orders cancelled, customers requesting that they pay the additional tariffs on import, while others are living with uncertainty with goods currently in transit.
Both the Irish food and pharmaceutical sectors thrive on highly developed supply chain ecosystems, encompassing everything from specialist packaging to logistics, patient information leaflets for pharma and ingredients. Many multinational packaging companies based in Ireland support these sectors directly. While some components can be substituted, many are niche, regulated and difficult to replicate quickly.
Our knowledge economy is also central to these industries. Ireland’s universities, including TU Dublin, have played a key role in supporting US firms through tailored programmes and research partnerships. Building such an academic-industrial ecosystem in the US would likely take six to 10 years, even under the most ambitious plans.
Trump’s goal of reshoring production to “Make America Great Again” faces several hurdles. Substituting premium Irish food products with domestically sourced alternatives in the US is unlikely in the short term, given the high standards and global reputation of Irish producers.
In the pharmaceutical space, the logistics and regulatory challenges to reshoring are considerable. The average build time for a greenfield facility is three–five years, with regulatory validation for individual products taking an additional six–12 months.
Developing a skilled workforce could take up to a decade, making it unlikely that such efforts would bear fruit within a single US presidential term. Even if Trump serves another four years, it is improbable that these changes could materialise before a new administration potentially alters the course.
In response to these uncertainties, the Irish pharmaceutical sector must focus on building resilience. Companies are strengthening supply chain agility, diversifying export markets and investing in localised production capabilities.
Experts have warned that moving pharma operations back to the US is costly and would take years to scale. For example, Eli Lilly announced $27 billion in US investment, but many companies are hesitant to follow due to the industry’s deep reliance on global supply chains and existing FDA-compliant facilities.
Tariffs could also lead to disruptions in the supply of medicines, delays in essential treatments, and even drug shortages. The uncertainty may deter pharmaceutical R&D investments in Ireland, potentially slowing medical innovation. Pharmaceutical firms in the EU have warned of a “risk of exodus” if tariffs continue.
These disruptions highlight the importance of having well-trained professionals to navigate such complex supply chain challenges. Each of the programmes we run in this area includes dedicated modules in supply chain resilience and simulation, preparing students to manage risks, design resilient systems and understand global trade dynamics.
At the time of publishing, President Trump has appeared to back-track somewhat and pause some tariffs. However, if they progress, particularly targeting the pharmaceutical sectors, Trump’s tariff policy could have far-reaching effects on Ireland’s economy, as well as food.
The interdependence between Irish exports and US markets makes strategic planning and adaptation essential. At the same time, these developments highlight the growing importance of logistics and supply chain education in preparing future leaders to manage global disruptions with resilience and innovation.
Written by Dr Kevin Byrne, Dr Chao Ji-Hyland and Dr Nikolaos Valantasis Kanellos of the Research Centre for Sustainable Technology and Digital Innovation at TU Dublin. The School of Business Technology, Retail, and Supply chain at TU Dublin offers programmes across the full spectrum of the Irish National Framework (NFQ) including a Level 6 Logistics Associate Apprenticeship, a Level 8 BSc in Logistics and Supply Chain Management, a Level 9 MSc in Logistics and Supply Chain Management, and opportunities for doctoral research at Level 10.
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