Might Americans soon have to pay more than €10 for a pound of Irish butter?
A lot of figures are being thrown around in relation to US President Donald Trump’s announcement this week of new tariffs on goods coming into the United States from various countries.
For the European Union it is a 20% tariff, but what does that mean in simple terms?
Essentially, any American company buying products from the EU will have to pay an extra 20%, to the US government, to get products into the country before they can be sold.
They can choose to absorb this cost increase, but many won’t want to do this, and some simply won’t be able to and the price rise is likely to be passed on to customers.
Take Kerrygold for example.
It is one of the country’s big success stories in terms of growing an Irish food brand globally and began selling into the US market in the early 1990s.
Kerrygold is now the second best-selling butter brand in America.
A 454g, or 1lb, pack of Kerrygold in Ireland costs around €5.49 – that’s pretty much the standard price in Ireland.
However, across the Atlantic it is much pricier.
At the moment a pound, 454g, of Kerrygold costs $9.54 (€8.68) in Walmart, and in Target the same packet of butter is even more expensive at $9.79 (€8.91).
But once those US tariffs on EU products kick in, the price could jump by an additional 20%.
That would mean a standard 454g packet of Kerrygold could end up costing $11.45 (€10.42) on American supermarket shelves.
The US accounts for a tenth of Irish food and drink exports, with around €1.9 billion worth sold into America last year.
Dairy and whiskey accounted for the vast majority, and Irish producers worry that such severe price hikes will do huge damage to sales of their products Stateside.
Ornua, the co-operative that owns Kerrygold, says the tariffs will have a negative impact on its business and hopes a solution can be negotiated.
However, if not, the EU could introduce retaliatory tariffs, meaning US imports in Ireland could similarly jump in price.
