The Macroeconomic Impact of Tariffs on Northern Ireland

In this paper, we use a model simulation‐based approach to assess the macroeconomic impact of US tariffs on the Northern Ireland (NI) economy. More specifically, we use AMNIE, a newly developed structural macroeconomic model for NI, designed for medium‐term economic projections and policy analysis to examine quantitatively the effects of tariffs of different sizes set by the United States on EU and UK exports. We find that Northern Ireland experiences persistent output losses across all tariff scenarios, with trade acting as the primary transmission channel. Further, targeted tariffs on major trading partners generate substantially larger effects than uniform global tariffs, reflecting Northern Ireland's strong integration with UK and EU markets. Finally, while Northern Ireland is significantly affected, cross‐country comparisons show that its exposure lies between that of the United Kingdom, which experiences larger declines, and the European Union, where impacts are somewhat more moderate. While these effects may be partially mitigated by trade deflection under Northern Ireland's dual‐market access, the magnitude is uncertain and likely to depend on the scale of tariff differentials, with evidence suggesting that sizeable rerouting effects typically arise only in response to larger tariff shocks.