Threat of US tariffs spells uncertainty for NI businesses

"Uncertainty" is the most common word you will hear if you ask a business in Northern Ireland about how they are feeling about the prospect of the United States imposing tariffs.

They are one of the cornerstones of US President Donald Trump's second term and have left other countries scrambling to respond on an almost daily basis.

That uncertainty was underlined when 25% tariffs on steel and aluminium coming into the US went into effect overnight - with the EU responding by saying it will impose counter-measures on €26bn (£21.9bn, $28.3bn) worth of US goods.

The UK has said the tariffs are disappointing and Westminster will push for a trade deal - but, in the meantime, what of Northern Ireland?

It is somewhere that could be uniquely affected by the impact of both EU and UK tariffs - but businesses say they are trying to stay positive.

• EU retaliates after Trump tariffs on steel and aluminium take effect

Politicians and businesspeople are in Washington DC this week in the run-up to St Patrick's Day, making the case for US investment and trade in Northern Ireland.

The United States is a big market for Belfast watchmakers Nomadic, accounting for

For Bloc Blinds the potential of a changed trading relationship with the US brings different challenges.

The company has its headquarters in Magherafelt in County Londonderry but recently also opened a manufacturing site in Texas.

Blinds produced there and sold to the US market would not be subject to tariffs, but managing director Cormac Diamond said this did not mean he could take his eye off the ball.

"We have to be cognisant of the challenges of tariffs because in spite of doing our production in Dallas we are still serviced by a supply chain that is affected by tariffs," he said.

"That said, since we are doing most of the added value within the Dallas plant itself we certainly have reduced exposure to tariffs.

"We're pretty confident that we are in a secure position regarding tariffs, but tariffs can affect things both directly and indirectly. There may be some unforeseen events that we have not planned for."

Mr Diamond said that he, like Mr McAuley, was positive about the future of doing business in the US.

"The size of the market certainly excited us when we decided to embark on the US journey.

"There is a very positive approach to business in the US and you can see it in evidence of buildings, infrastructure, development etcetera."

"Because it is so uncertain we are almost having to plough ahead regardless and just take that into consideration, when we have a bit more concrete information," he said.

"It is very much about trying to keep the business going as normal, plan as much as we can for the future but not make anything too concreted because there is that level of uncertainty."

Mr McAuley added that the business environment in the US still felt positive and he remained confident about the future of the trading relationship.

The United States is a big market for Belfast watchmakers Nomadic, accounting for 22% of its sales.

Peter McAuley, the company's founder, said there was huge potential for it to continue to grow there.

"It feels like we've barely scratched the surface of the potential, there is a really strong market," he said.

"It's not necessarily concentrated around the traditional Irish hubs that you might expect, it's quite spread out across the entire country."

Mr McAuley said that while he hoped Nomadic would be "a little bit protected" because of the luxury nature of the company's products, he believed any tariffs would have an impact on sales.

In 2022, Northern Ireland companies exported goods to the US with a value of £1.9bn.

That was the third biggest external market for goods behind GB (£11bn) and Ireland (£4.6bn).

Tariffs are effectively a tax on trade, applied to goods as they enter the country.

The charge is paid by the domestic company that imports the goods, not the foreign company that exports them.

However, the burden can ultimately fall on the exporting firm if it has to cut its prices or finds that it can no longer compete in that market.

They can be used by governments to protect domestic industries by making competing imports more expensive.

Under the post-Brexit deal known as the Windsor Framework, Northern Ireland is essentially still inside the EU's single market for goods and enforces the EU's customs code.

If tariffs were imposed on the UK they would affect Northern Ireland goods.

But even if the UK avoided US tariffs, the Windsor Framework could have implications for Northern Ireland.

If, for example, the US and EU entered into a tariff war with the EU deciding to put retaliatory tariffs in place, it could lead to a situation where Great Britain is not applying tariffs to US goods, but Northern Ireland is.

The issue of tariffs is never far away during discussions in Washington DC this week.

Speaking before a Federation of Small Businesses (FSB) event in the city, Tina McKenzie, the organisation's policy chairperson, told BBC News NI the unique position of Northern Ireland, due to the Windsor Framework, was on the minds of many.

"We are looking now at what is going to happen between the EU and US.

"For our market, the Northern Ireland market, with an open border to the EU, we are quite concerned and we are watching closely what impact any kind of tariffs between the EU and US, and vice versa, would have on the Northern Irish market.

"We are waiting and watching that but we are also here in Washington to make clear that we are in very a unique position in that we are open to the United Kingdom but also without a border to the EU."

Ms McKenzie added that regardless of what happened, many businesses would be able to respond.

"I think most business people are pragmatic, they look for the opportunity, they are quick to pivot and change and if something comes along they will deal with it."