Arthur Gaskin, tax counsel, Ogier: The current strain in EU–US trade relations reflects a deeper structural shift rather than a temporary diplomatic impasse. Although the July 2025 EU–US framework agreement was intended to restore predictability by capping most tariffs at 15%, repeated US threats to raise tariffs - particularly on auto-mobiles to 25% - have exposed the fragility of that settlement. For businesses, the core reality is that transatlantic trade is now subject to recurring political leverage, unilateral action, and implementation disputes. As a result, uncertainty must be treated as a standing operating condition, not a passing phase.

A central lesson for companies is the need to move away from highlevel country exposure analysis and toward productspecific assessment. Tariff risk increasingly turns on individual HS codes, sector carveouts, and overlapping regimes such as US national security (Section 232) tariffs and potential EU countermeasures. This fragmentation means that two products shipped by the same company can face dramatically different trade outcomes. Conducting granular audits of tariff exposure by product line is therefore essential for sound pricing, sourcing, and investment decisions.

Customs and trade planning have simultaneously evolved from compliance exercises into strategic management tools. Lawful tariff engineering—through origin analysis, valuation choices, and use of customs relief mechanisms—can materially reduce or defer duty costs. These tools allow businesses to cope with volatility without resorting immediately to costly restructurings of global supply chains. In the present climate, firms that underinvest in customs strategy are likely to absorb avoidable costs that more agile competitors mitigate.

At the same time, businesses should resist the false binary between full reshoring and maintaining the status quo. Political signals from Washington increasingly favour domestic US production, but wholesale relocation is rarely costeffective or operationally realistic. More nuanced approaches—such as partial localisation, finalstage assembly in the US, or selective joint ventures—can reduce tariff exposure while preserving supplychain flexibility and capital discipline.

Market diversification has also become more strategically important. While the EU–US corridor remains indispensable, overreliance on it amplifies political risk. Firms should accelerate exploitation of EU free trade agreements with other partners and rebalance export portfolios where possible toward jurisdictions with greater regulatory stability. This is less about exiting the US market than about restoring optionality and bargaining power.

Engagement with policymakers is another underappreciated lever. EU countermeasures, safeguard clauses, and anticoercion tools are not automatic; they are shaped through consultation and political choice. Companies that engage early—individually or via trade bodies—have a better chance of influencing how retaliation is targeted and how collateral damage is distributed across sectors.

Finally, contractual and governance frameworks must catch up with trade reality. Commercial agreements that lack tariff reopener clauses and clear riskallocation mechanisms expose firms to sudden margin shocks. Transparent communication with investors and customers about tariff exposure and contingency planning is equally critical, as markets increasingly price geopolitical risk into valuations.

In short, the overriding strategic shift is from pursuing trade stability to managing trade flexibility. The EU–US relationship remains economically vital but is now politically contingent. Businesses that embed flexibility into sourcing, contracts, customs planning, and market strategy will be better placed to withstand further escalation, regardless of whether current tensions subside or intensify.

This article appeared in the May 2026 edition of the Irish Tax Monitor.