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Ensuring you are tariff ready
With the Trump administration implementing broad tariffs on EU imports to the US—and EU countermeasures expected in the coming weeks—Irish businesses are facing a new economic reality. This shift in international trade policy demands immediate and strategic planning, particularly from SMEs and manufacturers.
The impact will be twofold: Irish exporters to the US will face direct tariff costs, while many other businesses will encounter increased input costs as EU counter-tariffs take effect on US-manufactured goods. While the introduction of tariffs is beyond any business’s control, preparing for this new trading environment is entirely achievable.
If tariffs are set to become a long-term feature of international trade—as now seems likely—businesses must position themselves to navigate this challenging landscape effectively.
A key first step is to analyse supply chains to assess potential duty impacts on both purchases and sales. This data will be vital for evaluating options and making informed strategic decisions. Equally important is a thorough review of supplier and customer contracts to identify clauses that allow for price adjustments in response to duty increases or exclusive supply agreements that could limit flexibility.
In this environment, product pricing requires close attention. A clear understanding of the margins each product currently delivers will allow businesses to allocate any new tariff costs appropriately, helping to safeguard profitability despite shifting conditions.
Robust financial modelling is now essential. Businesses should develop “what-if” scenarios across varying tariff rates, including simulations of potential customer losses in affected markets. This proactive approach will help identify critical actions needed to mitigate cost increases, protect margins, and retain key markets and customers.
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Cash flow management will also take on heightened importance, with pressures expected on both the supply and demand sides. Modelling potential downside risks will highlight vulnerabilities—particularly where businesses may need to absorb higher manufacturing costs over extended periods due to tariffs.
Strategic measures to reduce tariff exposure should include reviewing sales arrangements to eliminate non-dutiable amounts where possible and maintaining a close watch on global trade developments beyond the US-EU dynamic. As exporters from other regions potentially divert supply to the EU, additional protective tariffs could emerge.
As businesses work to navigate this evolving and uncertain landscape, ifac is here to provide critical support. Our services include detailed management accounting, contract reviews, and ongoing monitoring of tariff developments to help ensure that businesses remain adaptable, resilient, and competitive.
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