New research commissioned by the Department for the Economy warns that changes in United States trade policy could weaken Northern Ireland’s economic growth, trade and consumer spending. For North West businesses, the findings underline the importance of stronger supply chains and more diverse export markets.

The analysis, conducted by the Economic and Social Research Institute and the National Institute of Economic and Social Research, considers several possible tariff regimes rather than predicting one fixed outcome. Across every scenario, however, the direction is broadly consistent, trade declines immediately, inflation rises temporarily and economic output and consumption remain below where they would otherwise have been.

Trade is the principal channel through which tariffs affect Northern Ireland. Under the tariff regime announced by the US Administration in April 2025, the research estimates that Northern Ireland’s exports to the US could be 14% lower in the long term than under a scenario in which tariffs had remained unchanged since 2019. Imports from the US could fall by 12%.

The consequences vary considerably between industries. Chemicals, other transport equipment and other manufacturing make the largest negative contributions to the change in exports. Electrical machinery performs more positively on the export side but is particularly exposed to disruption affecting imported components and intermediate goods.

This matters for the North West, given the regional concentration of advanced manufacturing, engineering and internationally connected supply chains. Businesses may face weaker demand from US customers, higher costs for imported materials and greater uncertainty when pricing contracts or making investment decisions.

The effect is not confined to companies trading directly with America. Tariffs disrupt production networks across Britain, Ireland and the European Union, all of which are important markets and suppliers for North West firms.

There is some resilience in Northern Ireland’s unique position. Its access to both the UK and EU markets could encourage trade to shift towards Britain, Ireland and the wider EU. The research estimates modest increases in trade with these markets as businesses redirect activity away from the US.

A tariff difference between UK and EU goods could also create opportunities for some Northern Ireland exporters. Yet the advantage will depend on the product, applicable tariff and rules of origin. The researchers caution that any gains from trade diversion are unlikely to outweigh the wider economic costs of greater trade barriers.

For businesses, the immediate priority is resilience. Firms should understand where critical inputs originate, assess their exposure to US customers and suppliers, and consider how tariffs could affect margins and contracts. Exploring alternative markets may also reduce dependence on any single destination.

Government must support that adjustment. The research recommends mapping strategic supply chains, improving systems for identifying emerging vulnerabilities and helping exposed businesses enter new markets.

Northern Ireland cannot control US trade policy. It can, however, reduce its exposure by making better use of its dual-market access and strengthening trade across these islands. For the North West, deeper cross-border economic links are an increasingly important source of resilience.

You can read the full Economic Effects of the US Trade Policy Changes on Northern Ireland’s Trade