Fears have been raised that Irish goods could be dragged into global trade wars after a World Trade Organisation ruling that could lead to the US taking aim at €6.9bn of EU goods.
The WTO has given US president Donald Trump the go-ahead to impose tariffs on European exports annually in retaliation for illegal government aid to Airbus.
The award is the largest in WTO history — nearly twice the previous record of just over $4bn (€3.6bn) set in 2002 — and raises fears Irish whiskeys and foodstuffs could be caught up in the row.
Business group Ibec called for “immediate talks” to deescalate the row, saying that “business links between Ireland, the EU, and the US are vitally important to global supply chains”.
The Irish Exporters Association said given the continuing threat of a crash-out Brexit, it was “particularly concerned by US threats to place tariffs on important Irish exports such as Irish whiskey or agricultural goods”.
The WTO decision is one of the final hurdles before the US can announce which products from the EU it will target with tariffs selected from an initial list that includes Airbus planes and parts; wine and spirits produced by LVMH, Remy Cointreau, Pernod Ricard, and Diageo; as well as goods manufactured by Christian Dior and Hermes.
It is a milestone in the WTO’s longest-running dispute that will further test transatlantic relations, which have deteriorated under Mr Trump’s America First approach to international ties.
The US is already in a trade war with China, and any wider flareup of tit-for-tat tariffs with Europe could threaten a fragile global economy.
The WTO earlier this week cut its trade growth forecast for this year to the weakest level in a decade, warning against a “destructive cycle of recrimination”.
The tariffs can take effect after the WTO adopts the report, which is expected to occur in Geneva this month. The Trump administration is considering a particularly damaging trade weapon known as “carousel” retaliation, which would enable the US to regularly shift around the targeted goods, sources said last month.