Tariffs, trade and what lies ahead

With US tariff policy shifting and EU/US trade relations evolving, John O’Loughlin examines what the latest developments mean for Irish businesses

The current 10 percent global tariffs were imposed under Section 122 of the US Trade Act of 1974.

Introduced on 24 February 2026 following the removal of the International Emergency Economic Powers Act tariff measures, these tariffs are scheduled to expire on 24 July 2026 unless Congress agrees to extend them.

Attention is now turning to the outcome of the United States Trade Representative’s (USTR) Section 301 investigations into excess supply and forced labour practices.

On 2 June 2026, USTR proposed additional tariffs of 10 percent on imports from the European Union, Britain and 14 other economies as well as 12.5 percent tariffs on imports from a further 44 economies.

While no final decision has yet been announced, there is growing expectation that any Section 301 measures introduced could replace the Section 122 tariffs following their expiry.

For EU and UK exporters to the US, the proposed 10 percent Section 301 tariff would broadly maintain the current tariff position established under Section 122, limiting the immediate impact of such a transition.

Importantly, the proposed Section 301 measures would continue to exclude several key sectors, including civil aircraft, aircraft engines and parts, pharmaceuticals, Section 232 products, and USMCA-compliant Canadian and Mexican goods.

EU/US trade deal

The European Parliament has approved legislation implementing the EU/US trade agreement, including the elimination of tariffs on virtually all industrial goods of US origin and enhanced market access for a range of agricultural and seafood products imported from the US.

The final legislation incorporates several amendments negotiated by Parliament and the Council to strengthen the Commission’s original proposal.

These amendments include a sunset clause, under which the agreement will expire on 31 December 2029 unless renewed, following a review of its economic impact on EU industry, agriculture and SMEs.

Parliament has also secured additional protections linked to ongoing US tariffs on steel and aluminium imports. The Commission will be able to suspend tariff preferences if the US continues to apply tariffs above 15 percent on EU steel and aluminium derivative products beyond 2026 or fails to address wider EU concerns regarding the tariff treatment of certain exports.

US launches aerospace trade talks

On 9 July, US President Donald Trump issued a proclamation following the completion of a Section 232 investigation into imports of commercial aircraft, jet engines and related parts.

The investigation concluded that such imports threaten to impair US national security, citing the strategic importance of the aerospace sector to defence, transportation, cargo operations and the broader US economy.

Despite the findings, the Trump administration has not imposed new tariffs at this stage.

Instead, the US Department of Commerce and Office of the US Trade Representative have been instructed to negotiate agreements with trading partners to address the identified concerns and support the health of the domestic aerospace industry.

The proclamation provides a 180-day period for negotiations, after which Trump may consider additional measures if agreements are not reached or prove ineffective.

For Ireland—which has a massive footprint in commercial aircraft leasing, financing and maintenance—this outcome avoids immediate penalty duties on aircraft articles originating in the EU.

The White House stated that the US aerospace industry faces challenges, including increased reliance on foreign supply chains, reduced domestic manufacturing capacity, skilled labour shortages and growing production costs.

However, the decision not to impose immediate tariffs is likely to provide short-term certainty for aircraft manufacturers, airlines, engine producers, maintenance providers and aerospace supply chains reliant on international sourcing.

While commercial aircraft, jet engines and aircraft parts avoid new Section 232 tariffs for now, the sector remains under review, and future trade measures are possible if negotiations fail to address US national security concerns.

EU extends suspension of US aircraft dispute tariffs

The European Commission has adopted Regulation (EU) 2026/1549, extending the suspension of additional tariffs on certain US-origin goods originally imposed as part of the long-running World Trade Organisation Airbus-Boeing dispute.

The suspension will continue from 11 July 2026, preserving the tariff-free treatment in place since 2021 and supporting stability in transatlantic trade relations.

The Commission noted that the underlying circumstances of the dispute remain unchanged and that the US has not reimposed retaliatory measures against EU exports.

As a result, the EU will continue to suspend its countermeasures while monitoring developments in EU/US trade relations and retaining the ability to review its position if circumstances change.

For the aviation sector, this provides continued certainty, particularly as aircraft engines were not included in the EU’s original retaliatory tariff measures.

John O’Loughlin is Partner, Global Trade & Customs, PwC Ireland