ieExplains: What are tariffs and how do they affect me?
"As a member of the EU, we apply the Common Customs Tariff (CCT) for imports from non-EU countries and benefit from tariff-free trade with other EU members."
Put simply, a tariff is a tax on imported or exported goods. There is little difference between a conventional tax and a tariff as far as we, as consumers, are concerned.
Trump recently described the EU Value Added Tax (VAT) as a form of tariff, so it appears it’s more of a case of “potaytoe/potahto” from his perspective.
In reality, a tariff can take various forms, such as a percentage of the value of the goods, known as an “ad valorem tariff,” for example, 10% of the product’s price.
A “specific tariff” adds a fixed fee per product unit, such as €1 per kg of sugar. Finally, a “compound tariff” combines a percentage and a specific tariff.
If it sounds complicated, you’re right. As consumers, we are worried about the cost of our goods each week and how new tariffs may impact our disposable income.
I can tell you that tariffs have a knock-on effect on the cost of living in Ireland and elsewhere.
The word tariff passed into the English language via the medieval Mediterranean and is derived from the Arabic word “ta’rif”, meaning an inventory of fees to be paid.
In the past few months, it’s become a word associated with the United States, but tariffs are not just limited to the vagaries of the Trump administration.
Using the Google Trends tool tells a tale of two large public interest episodes in recent times when searching for the term “tariff.”
The first large spike occurred in March 2018 and correlates with Trump’s first presidency imposition of tariffs on steel and aluminium.
The second happened on February 2nd, 2025, as the world adjusted to the news of tariffs for Canada, Mexico, and China, once again set by said US President. Irish interest in the term has roughly mirrored global trends.
As an island nation, Ireland is particularly vulnerable to the impact of tariffs. We rely heavily on the import of goods such as food, fuel, and building materials.
As a member of the EU, we apply the Common Customs Tariff (CCT) for imports from non-EU countries and benefit from tariff-free trade with other EU members.
Whether a tariff is imposed or suspended by the EU or another governing body, it still impacts the price we pay at the till.
There are three main reasons why governments set tariffs.
Firstly, to protect our domestic industries. If we make foreign goods more expensive, then tariffs can help our local businesses to compete.
Secondly, tariffs can be a source of income for our government, especially as we rely on imports.
For example, in the case of importing cars into Ireland, we apply not only VAT but also VRT, all of which goes back to the government and pays for infrastructure.
Finally, countries use tariffs in trade negotiations as a trade policy tool, and this is where the Trump Administration has been running rings around Canada, China, and Mexico recently.
By imposing a tariff, they are encouraging fair trade or using it as a retaliation tool in a trade dispute.
The effect of tariffs on consumers is that the imported goods become more expensive than before, and that can lead to inflation, or a term that we’re all familiar with, an increase in the cost of living.
You can have a trade war between countries in a tit-for-tat format. Countries can retaliate by imposing their own tariffs, which can lead to a trade war or conflict between trading partners.
Tariffs can help local industries by reducing competition from foreign businesses on imported goods. Still, as a member of the EU, there are no tariffs for member trade, and this may not necessarily help Irish trade.
Higher tariffs or import costs can result in decreased trade between countries.
For example, in 2018, the Trump Administration placed a tariff on imported washing machines to protect American manufacturers from foreign competition. Demand for US-manufactured washing machines increased, and more jobs were created as a result.
The average purchase price of laundry equipment in the US increased 12% once adjusted for inflation, by the time the tariffs expired in 2023, and obviously, this impacted consumers.
Not just from a purchase price point of view. According to research from the University of Chicago, there was an efficiency loss when consumers could not afford newer washing machine models and used older, inefficient machines, which consumed more water and electricity.
Plenty of Irish-related products and services, such as pharmaceutical, food, and electronic items manufactured here, may attract a tariff. The EU can also retaliate and place tariffs on imported goods from the US.
There are no winners in a trade war, and new tariffs are bad news for all of us trying to make ends meet.
Ultimately, any new charge will impact our pockets, but it remains to be seen how much. For now, all we can do is wait and see what is decided in the future and hope that the exchange of words doesn’t materialise into real-life consequences for us all.
Isn't it great to see the stretch in the evenings now? I am enjoying getting out into the sunshine when it appears.
March is the perfect season to start getting my bits and pieces ready to grow food again this year.
I rarely buy new gardening equipment anymore because I have plenty of pots and trays, but everything needs to be cleaned thoroughly before starting my seeds.
I use a little splash of common vinegar mixed with washing up liquid in warm water and then scrub my pots with a brush to remove any leftover residue or hidden slug eggs.
Once clean, I set the pots out in the sun to dry and recycle them for another year.
Vinegar is my secret weapon to neutralise smells and get rid of limescale in the garden and the home.
I get very large containers from my local international supermarket.
