EU will export goods via NI for lower tariffs, says economist

European Union firms will try to export goods via Northern Ireland in an attempt to get a reduced tariff rate when exporting to the US, a Nobel prize winning economist has suggested.

US President Donald Trump has imposed a 10% tariff on UK goods but a 20% tariff on EU goods.

Northern Ireland is part of UK customs territory but also has an open trade border with the Republic of Ireland, which is in the EU.

Paul Krugman made the comments in conversation with the journalist Ezra Klein.

“Probably a lot of EU goods trans-ship through Northern Ireland to get the lower tariff rate,” he said.

Typically goods cannot just be exported via a lower tariff country to get a lower tariff.

Instead they need to undergo “substantial transformation” in the lower tariff country which usually means some form of processing, although the rules differ from product to product.

Mr Krugman won the Nobel prize for economics in 2008 for his work on on international trade theory and economic geography.