Tariffs are back in the news after US President Donald Trump proposed introducing them on China, Mexico and Canada - but what are they and what is the danger for the Irish economy?
What are tariffs?
Tariffs are taxes imposed on goods imported from abroad.
The idea is that they make goods from other countries more expensive, so consumers purchase domestically made items instead.
They are frequently used to protect farmers from cheaper agricultural imports from abroad.
Policies which use these taxes to favour domestic industries are known as protectionist.
When one country imposes tariffs on another it often results in tit-for-tat taxes on goods in what is called a trade war.
These tariffs tend to block international trade, put up costs for consumers and also increase inflation.
What is Donald Trump doing?
US President Donald Trump proposed introducing tariffs on China, Mexico and Canada, but paused moving against the latter two neighbouring countries after they cut a deal to increase security on their borders with the US.
However, 10% duties on all Chinese goods were imposed today.
China has retaliated with 15% tariffs on US coal and liquefied natural gas, and will impose 10% on crude oil, agricultural machinery and large engine cars.
What about tariffs on EU goods?
On Sunday Donald Trump promised to tax goods exported by the European Union to the US.
It is not yet clear exactly what items will be hit with tariffs, or at what rate.
Mr Trump did impose additional duties in his first term in office, some of which affected Irish goods including butter, cheese and cream liquors.
Ultimately those tariffs were suspended.
What is the danger for Ireland now?
The US is the single biggest export market for Irish goods.
In 2023 Ireland exported €54 billion to America.
Of that, a massive €36bn was pharmaceuticals. Much of those medicines are made by US companies with operations in Ireland.
A major concern is that if Mr Trump's tariffs on EU goods were to include those affected drug manufacturers here, it could have a significant effect on the Irish economy.
In a report, stockbrokers Davy said corporation tax paid by US multinationals in Ireland could decline if pharmaceutical exports were "re-directed as a result of tariffs".
It predicted there could be a significant impact on other exports too.
American corporations also provide thousands of well-paid jobs.
The average wage for an employee in a foreign owned enterprise was €77,500 last year, but the equivalent for an employee of a domestic-owned company was €59,900.
