Northern Ireland’s manufacturing sector is bracing itself for more disruption and turmoil, despite dodging the 20% tariff the Trump administration has levied on its southern counterparts.
The north’s unique position of having dual market access to the EU and UK, while benefiting from the UK’s lower 10% tariff for goods entering the US, will not yield a net benefit, Manufacturing NI boss Stephen Kelly said.
“On the face of it, it looks like the UK and Northern Ireland are in a better place than elsewhere in the EU.”
But he said the millions already invested in capital by manufacturers in the Republic, coupled with the much lower rate of corporation tax, is unlikely to result in a flood of investment across the border.
Mr Kelly said the fact Donald Trump has reserved the right to change the tariffs on a whim, creates too much uncertainty for major companies to take a gamble on.
Manufacturing NI chief executive Stephen Kelly. (MARGARET MCLAUGHLIN PHOTOGRAPHY )
“Trump is making it clear that this is not the end of this. Within the executive order, he reserves the right to take a unilateral decision to increase these tariffs or remove them, depending on how negotiations go with other countries and also an assessment on whether the policy is working.
“They’re not going to put their money down, plain and simple,” he said.
“Manufacturers need long-term policy stability in order to have confidence to make an investment to expand or create more manufacturing spaces.
“This has created more uncertainty rather than more opportunity for Northern Ireland.”
The Manufacturing NI boss said the biggest challenge for the sector could come from the EU’s retaliatory tariffs on US imports.
Under the post-Brexit arrangements, Northern Ireland firms will be subject to those EU tariffs.
As part of the Windsor Framework negotiations, the UK introduced a duty reimbursement scheme in 2023 to repay Northern Ireland firms caught up in the EU’s import duties.
But Stephen Kelly said at best the scheme is complex and at worst impossible.
“It’s too cumbersome and the levels of administration that are required are extreme and the information you need to gather is not always available.”
It has left some businesses out of pocket.
European Commission President Ursula von der Leyen said the European Union has a “strong plan” to retaliate against tariffs imposed by Donald Trump. (Omar Havana/AP)
“We’re talking about potentially millions of pounds already,” said the Manufacturing NI boss.
“The EU has already published 99 pages of commodities that it wishes to apply tariffs to as a result of Trump’s steel and aluminium plan.
“That 99 pages could expand to 300 to 400 pages.
“Multiply that by hundreds of commodities and different movements and it’s going to be impossible for manufacturers to navigate through it,” he said.
“We need the Prime Minister to meet with the European Union and say each of us have a treaty responsibility towards Northern Ireland and we need to be careful in terms of our responses here.”