The new deal, while hailed for averting a potential 30% tariff trade war and providing a more stable economic environment, poses direct financial risks. The 15% tariff on EU goods exported to the U.S. will likely impact Irish and other EU businesses, as American buyers may seek discounted prices to offset the added cost, or consumers may simply opt for cheaper alternatives. This new reality for dairy economics could result in reduced sales and profit margins for European producers.

A major point of contention and confusion for the dairy industry specifically is the potential for a tariff divergence between Northern Ireland and the Republic of Ireland. Given that the industry operates on an “all-island basis” with integrated supply chains for raw milk, ingredients, and finished products, any difference in tariff treatment—such as the 10% rate agreed in a separate UK-U.S. deal—could create significant logistical hurdles and added costs for processors and dairy farmers.

While the deal benefits other European sectors, such as car manufacturers who will see tariffs drop from 27.5% to 15%, the arrangement has not been universally welcomed. Critics argue the agreement is “unbalanced” because the EU is accepting the 15% tariff without implementing reciprocal tariffs on U.S. goods. However, dealmakers in Brussels defend the compromise, citing the imperative to protect over €1.6 trillion in annual trade and avoid a damaging trade war.