Irish dairy exports would be among the hardest hit products in the event of a trade war between the European Union and the United States according to a new report.

Published by Rabobank, the report details the potential winners and losers if a brewing trade war comes to pass. The dispute between the US and EU relates to subsidies provided by the two to airplane manufactures Boeing and Airbus.

The US have threatened the EU with tariffs on 317 products, of which 44 relate to dairy. Covering European butter, yogurt and cheese, imports of these products to the US were worth $1bn (€897m) last year.

Ireland

In 2018, Ireland exported 34,467t of dairy products to the US. Of this, 81% was in the form of butter, worth €181.5m, while a further 18% was exported as cheese valued at over €40m.

Ireland produces 75% of butter imported into the US that would be affected by tariffs. In a worst-case scenario an additional tariff up to 100% would be added to these butter exports, doubling its price for US consumers.

Mary Ledman, global diary strategist for Rabobank explained how European branded butter is already sold at twice the price of leading US branded butter. As a result, European butter would be unlikely to sell as well if its price escalated to four times that of US butter.

Cheese

On the cheese front, Ireland faces less direct exposure than countries such as France and Italy but would be severely impacted by any disturbance to a market which imports 100,000t of European cheese annually.

Ledman said: “In general, speciality European cheeses are high value and not necessarily as price-sensitive at the retail level. However, a 100% surcharge on top of an already pricey product could have customers choosing a less-expensive domestic cheese or non-EU import.”