- This paper uses scenario analysis to estimate the potential impact of increased US tariffs on Northern Ireland’s trade flows and to examine how these effects impact on key macroeconomic indicators, including Gross Domestic Product (GDP), employment, unemployment, domestic demand, wages and prices.
- The analysis suggests that Northern Ireland is vulnerable to changes in the global trading environment, with tariff shocks affecting the economy primarily through trade. The findings indicate that tariffs targeting key trading partners, particularly the UK and EU, have the greatest impact on trade and economic activity.
- While Northern Ireland’s unique dual-market access provides some degree of resilience and may create opportunities for trade diversion or investment adjustment, these benefits are expected to be limited and insufficient to offset the broader negative effects of higher trade barriers.
- The research suggests that Northern Ireland’s exposure to tariff shocks lies between that of the EU and the UK.
- A key caveat is that the modelling does not fully capture the potential for firms to relocate investment or production in response to tariff differentials, which may be particularly relevant given Northern Ireland’s proximity to Ireland and its unique market access arrangements.