We need 25% US trade tariffs ‘like a hole in the head’

KERRY LIKELY TO BE AMONG THOSE HARDEST HIT IN TRADE ROW OVER EU AIRCRAFT SUBSIDIES

THE United States is set to impose tariffs of 25pc on Irish dairy products - as well as French wine, and Scotch and Irish whiskies - as punishment for illegal EU aircraft subsidies.

Irish products targetted include cheeses, butter and liqueurs which could impact well known Irish brands Baileys and, especially, Kerrygold.

Kerrygold is the No. 2 butter brand in the US and exceeded €1 billion annual retail value globally last year.

The announcement came after the World Trade Organization gave Washington a green light to impose tariffs on $7.5 billion worth of EU goods annually in the long-running subsidies row.

The North American market for Irish dairy grew by 36pc to €366m last year, driven by growth in the economy. Butter exports increased by 90pc to €161m. The value of cheese exports to the US grew by 20pc last year.

A representative body for Irish dairy processors, Dairy Industry Ireland (DII) described the news as hugely disappointing.

It said it had been working assiduously with processing members, as well as Irish and EU authorities, to try and ensure that Irish dairy products do not get dragged in as an unintended consequence of the aircraft tariff dispute.

Companies such as Kerry, Glanbia and Ornua are huge employers within US dairy, and Irish processers have a long record of both investment in production in the US, as well as having success in importing product from Ireland, such as the Kerrygold success story.

“Irish agricultural product is already exposed to hefty duties in comparison to other industrial goods, and any escalation of this dispute will lead to damage to both the US and EU economies and consumer prices,” said DII.

Ireland has grown its exports of Kerrygold branded butter and cheese to the US to over 34,000 tonnes in the last decade, IFA Dairy chairman Tom Phelan highlighted.

“These tariffs have the potential to reduce margins or market share or both. The EU and Irish Government must make every effort to negotiate our way back to normal trade flows,” he said.

Meanwhile, the president of ICMSA says we need threatened US tariffs “like a hole-in-the-head”.

Pat MCCormack said the idea that a range of Irish food products being exported to the US could be hit with a new 25% tariff in the present circumstances where the prospects for our existing major export market were “frankly terrifying” was almost beyond belief.

“It is intolerable that farmers are made to bear the cost of EU policy decisions and trade wars in which they play no part and from which they derive no benefit. We can’t afford this at the best of times, but where we are now, this is sheer madness,” said Mr McCormack.

Kerrygold is the No. 2 butter brand in the US and exceeded €1 billion annual retail value globally last year.