knowledge 31 July 2025 |

The Impact of US Tariffs on Ireland’s Life Science Sector

Ireland is home to many of the world’s leading pharmaceutical, biotechnology and medical device companies which have been attracted by Ireland’s strategic EU location, skilled workforce, stable regulatory regime and favourable tax regime.  The sector employs over 100,000 people in Ireland, with many leading life sciences companies locating their global manufacturing and R&D facilities in Ireland. The US is a crucial export market for Ireland, with over €44 billion of the €72 billion worth of goods exported from Ireland to the US in 2024 relating to medical and pharmaceutical products.  

As noted in our previous briefing, pharmaceuticals have so far been exempt from the 10% baseline tariff that has applied to almost all goods exported from the EU to the US since April 2025. Other products, including medical devices, have been subject to a 10% baseline tariff since April 2025.

The imposition of a 15% baseline tariff (subject to certain exemptions) on these exports will be felt across the industry, and in turn, have significant and complex legal implications.  The deal will be seen by many in Europe as a poor outcome compared to the initial European ambition of a zero-for-zero tariff deal, although it is better than the threatened 30% tariff that would have applied to all exports from the EU to the US from 1 August 2025 in the event of no deal.

While details of the deal need be finalised over the coming weeks, the White House has confirmed that pharmaceuticals will be included in the 15% tariff rate. There remains some uncertainty, however, regarding the outcome of the US Department of Commerce’s investigation under s232 of the Trade Expansion Act, which is currently evaluating the national security implications of importing pharmaceuticals and pharmaceutical ingredients to the US. The scope of the s232 investigation covers a broad array of pharmaceutical products, including finished drugs, active pharmaceutical ingredients and key starting materials. The outcome of the s232 investigation is expected in the coming weeks and there is concern among some that pharmaceuticals may yet be hit with higher tariffs.

A point of particular concern for Irish businesses is that the EU-US tariff deal will leave Northern Ireland in a complicated position and will challenge the Windsor Framework (the post-Brexit trading rules agreed by the EU and the UK in relation to Northern Ireland). The deal will create a division on the island of Ireland, as exports to the US from Northern Ireland will be subject to the lower tariff rate of 10% negotiated as part of the UK-US trade deal, while exports to the US from Ireland will face the higher 15% tariff rate agreed as part of the EU-US deal. In addition, pharmaceuticals are not currently subject to the 10% tariff agreed with the UK and the UK-US trade deal contains a commitment to negotiate significantly preferential treatment for UK pharmaceutical products, contingent on the outcome of the s232 investigation. It is unclear if the EU will receive a similar commitment. 

In addition, a disparity in the tariff rates between Ireland and Northern Ireland is likely to bring US country of origin rules into sharp focus. US Customs and Border Protection apply strict rules regarding a product’s country of origin. Merely transporting a product from Ireland to Northern Ireland or repackaging a product manufactured in Ireland is unlikely to change its country of origin.  Only “substantial transformation” will have this effect. 

While the precise impact of the EU-US trade deal will take time to assess, Irish businesses should take action now to proactively assess the legal implications and prepare for future tariffs. In particular, businesses and their legal counsels should consider the following:

• Supply Chain Review: Reevaluate supplier networks, lead times, and critical dependencies. Consider the impact of the 15% tariff on supply chains and the cost of exported products; in this regard, transfer pricing arrangements with US entities will come under intense scrutiny.
• Contract Review: Review existing contractual arrangements to identify contractual obligations regarding tariff payments and liability, any potential reliefs which could be availed of and any potential exposure to legal action due to unwinding or changing arrangements. 
• Compliance Team: With tariff uncertainty likely to continue for some time, businesses should consider establishing a dedicated compliance team to keep up to date with developments and liaise as necessary with external advisors in relation to their legal, regulatory, tax and compliance obligations. 

Businesses should be aware that changes to transfer pricing policies are likely to necessitate changes to legal documentation including intercompany agreements, IP licence arrangements, supplier and manufacturing arrangements, R&D, tax and potentially connected issues like employment, if functions/people are being moved to tie to new transfer pricing.

While the imposition of tariffs is a serious challenge to the Irish and European life sciences sector and wider economy, the announcement of the EU-US framework agreement suggests that we are unlikely to see a return to a zero-tariff environment in the near future. 

 This announcement is not the end but more likely the beginning of a long dance between the EU and the US on tariffs. The imposition of these tariffs undermines the strong transatlantic partnerships on which many Irish businesses rely, and which have been built over many years. Ireland’s legal sector will help clients to manage the fallout from the imposition of these tariffs and to mitigate the damage which these tariffs may cause to the Irish economy. It is essential that businesses and their legal teams act sooner rather than later to protect and maintain their existing business and to build resilience to face the future challenges which will accompany this move towards a previously unforeseen high-tariff trading environment.