Northern Ireland (NI) and the Republic of Ireland (ROI) are subject to different trade agreements due to their respective ties to the UK and EU. The situation in NI is further complicated by the Windsor Framework, which governs post-Brexit trade arrangements. While NI is part of the UK, the Framework allows it to remain aligned with certain EU rules for goods. This was designed to avoid a hard border within Ireland. However, it also means that, dependent on the rules of origin for that product, many NI goods are still treated as EU-origin when exported – especially when they contain components from ROI or other EU countries. This has created a complex tariff landscape, with significant implications for businesses exporting to the US, where goods originate in both territories.

However, regardless of the complexities and changes in trade agreements between the USA, UK and ROI, the VAT treatment on the export of goods remains unchanged. Businesses will need to continue to meet the conditions to ensure goods remain zero-rated at export.

As outlined in a recent article by RSM, the UK-US agreement imposes a 10% tariff, in addition to the standard US tariff rate. In contrast, the EU-US deal applies a flat 15% tariff, but only where the base US customs duty rate is 15% or less. If that base customs duty rate exceeds 15%, EU goods are charged the US standard rate alone without additional tariffs. This means UK-origin goods are more competitive where the base US customs duty rate is below 5%, but EU-origin goods get a better deal when the base US customs duty rate exceeds 5%.

This has significant implications for businesses that source or manufacture goods across both NI and ROI. Such industries with cross-border supply chains are particularly exposed, as they will likely find that the differing tariffs lead to increased costs, regulatory complexity and market distortions.

As an example, let’s look at the dairy and chemical industries.

Milk and cream industry

When considering dairy, a major industry with operations across both NI and ROI, milk and cream, which are classified under commodity code 04029970, have a standard customs duty rate of 17.5% on import into the US. Goods of UK origin would therefore be subject to a total duty rate plus 10% tariff of 27.5%, while goods of EU origin would be subject to the standard US duty rate of 17.5%, without any additional tariffs.

Chemicals industry

In contrast, chemicals and pharmaceuticals tend to have lower duty rates. Chemicals and related products were the highest exported product by value to the US in June 2025 from Ireland. A large proportion of chemical products, such as those falling within Tariff Subheading 290541 (the 6-digit commodity code), attract a customs duty rate of 3.7%. Chemicals from NI which are UK origin, would therefore be taxed at a total of 13.7%, whilst those with EU origin from ROI would be 15%.

It is now more important than ever to ensure that the origin of goods has been determined correctly. Inaccuracy could result in either overpayment or underpayment of US duties at import – both of which carry financial risks. For instance, a dairy product made using ingredients from both NI and ROI could be classified as either UK or EU origin, depending on the applicable rule of origin. If the classification is incorrect, the business may overpay duties, directly impacting profitability. Conversely, underpayment could trigger penalties or investigations by US Customs and Border Protection, leading to reputational and financial consequences.

The broader concern is that these tariffs are not just economic; they are reshaping trade dynamics across Ireland.

Of immediate concern, businesses must now navigate dual regimes, and indirect tax considerations will play an increasingly central role in strategic planning. Assessing supply chains, assigning the correct commodity code, and ensuring accurate origin classification will be key to mitigating risk and adapting effectively.

The US is the ROI’s largest trading partner, accounting for 30% of all exports. In recognition of the significant challenges triggered by the changed tariff landscape, the Irish government launched its Action Plan on Market Diversification this week. At its core, it is geared at bolstering economic resilience by supporting Irish exporters to sustain existing trade but also expand to new markets. The Asia-Pacific market is earmarked as a key target for investment. This changed global tariff environment is clearly an inflection point for businesses across the island to consider strategic areas for investment. Trade flows that delivered success in the past may yield the same factor of growth in the future or may decline.

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