Two independent research papers have examined how recent changes in US trade policy are likely to hit Northern Ireland’s economy. Both were commissioned by the Department for the Economy: a macroeconomic paper from the Economic and Social Research Institute (ESRI) and the National Institute of Economic and Social Research (NIESR), and a companion trade paper from ESRI alone.
The Macro Economic Impact of Tariffs on Northern Ireland
The macroeconomic paper modelled five tariff scenarios against a no-tariff baseline to project effects on GDP, trade, employment, consumption, wages and inflation out to 2030. Across every scenario tested, GDP stayed below baseline. Imports and exports fell as trade costs rose and external demand weakened, household consumption came under pressure, employment dropped modestly, and inflation rose in the short term before easing as demand cooled.
The paper does flag one point in Northern Ireland’s favour: dual-market access under the Windsor Framework may offer some resilience and even open up opportunities as global trade patterns shift. But the research concludes those benefits aren’t large enough to offset the broader costs of higher trade barriers.
Economic Effects of US Trade Policy Changes
The companion trade paper looked at sector-level exposure. Chemicals and transport equipment manufacturing (excluding motor vehicles) are expected to see the largest falls in exports to the US, while electrical machinery manufacturing faces the biggest hit on the import side. On a more positive note, the research suggests trade with Britain, Ireland and the rest of the EU could tick up slightly as businesses adjust their trading patterns.
Economy Minister Dr Caoimhe Archibald said the tariffs had been “an unwelcome development for the global economy, creating uncertainty for businesses, investors and consumers across international markets.” She noted that as “a small, open economy with strong trading links to both Britain and the European Union, the north is particularly sensitive to changes in the global trading environment,” while pointing to dual-market access as a source of “important advantages” as trade patterns evolve.
“My priority remains supporting businesses, strengthening exports, attracting investment and ensuring our economy is well placed to navigate external economic challenges,” she added. “These findings provide valuable evidence on the local implications of changing global trade conditions and will help inform our response to them.”
The full reports are available on the Department for the Economy’s website.