Leitrim businesses brace for potential fallout as US threatens 30% tariff on EU imports

Leitrim businesses are bracing for potential fallout from escalating trade tensions between the EU and the United States, as Washington threatens to impose a blanket 30% tariff on all EU imports by August 1st.

The current trade negotiations mark the latest development in a saga that has been ongoing since Donald Trump announced reciprocal tariffs earlier this year.

Leitrim County Councillor Enda McGloin voiced concern about the implications for the local economy. “I am worried about them,” he said, citing the damage tariffs could inflict on trade with the U.S. for major local employers like Vistamet in Carrick-on-Shannon and Drumshanbo Gunpowder Gin.

“At the moment, between 35% and 40% of the current market for that particular alcohol product is in the United States. And Rigney is enjoying a very strong relationship with his business partner there.”

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According to McGloin, The Shed Distillery has made efforts to diversify its markets to reduce reliance on the U.S., but a steep tariff increase would still have significant effects.

“I know at the moment that Pat Rigney has done a considerable amount of work in forging out new markets, particularly in Asia and in Canada. And in other parts of the world, and Japan as well included … But certainly at 35%, if that was to go to, we'll just say, less than half, well then it would mean, I suppose in many respects, production would have to be scaled back, and that would result in job losses.”

The EU is currently considering retaliatory tariffs on U.S. services and goods such as American bourbon, but McGloin warned that escalating the dispute could backfire on Irish exporters.

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“We don't want a scenario where there could be tit for tat, and end up putting a substantial tariff on American bourbon coming in here, which in turn then would have a dramatic effect in relation to maybe a further tariff on alcohol products going into the United States.”

Decisions around tariff negotiations are being made at an EU level, leaving the Irish government with few options to directly intervene. McGloin added that he does not believe offering subsidies to affected businesses is a sustainable solution.

Pat Rigney, founder of The Shed Distillery and chair of Drinks Ireland, echoed McGloin’s concerns and urged negotiators to reach a deal quickly.

“It's outside our control because, you know, that is the remit of the European Union and the US to negotiate a deal, which I'm hopeful that they will. I think we have to be hopeful and optimistic that they will reach an arrangement.”

Rigney, who founded Drumshanbo Gunpowder Gin over a decade ago, said that despite the uncertainty, his company must continue moving forward.

“We have to just get on with our business and leave that to the negotiators. But I mean, I'm hopeful that, you know, the consequences both for the US and for Europe of not reaching an agreement are huge. So I'm hopeful that common sense will prevail and they will reach agreement.”

The distillery has already been dealing with a 10% tariff on EU alcohol sold in the U.S., imposed earlier this year. That challenge has been compounded by a weakening dollar.

“We have two challenges with the US. One is the weakness of the dollar. The dollar has weakened by about 15% since all of this started. And you have a 10% tariff. So, yeah, it has had an impact.”

In March, Rigney warned that Irish spirits producers were “uniquely exposed” due to the industry's dependence on exports, particularly to the U.S. That concern has grown with the threat of a new 30% tariff across all goods.