Tariffs of 20% on Northern Ireland goods entering the US could cost local businesses at least £100m in lost sales, an economist has estimated.

US President Donald Trump is expected to announce a new round of tariffs on Wednesday.

The UK government has been trying to negotiate an exemption but now expects that tariffs will be imposed on UK goods.

Northern Ireland sold goods worth about £1.3bn to the US in 2023, with a concentration in pharmaceuticals and industrial machinery.

Tariffs are effectively taxes applied to goods imported from other countries.

Governments impose tariffs in the hope of protecting local manufacturers from international competition.

Ulster University economist Esmond Birnie has calculated a “direct and narrow” impact of £100m in reduced sales from a 20% tariff.

He said second and third round effects, such as an overall reduction in global trade, could push the overall negative impact up to £200m – £300m.

He added that even a drop of £100m could still have a significant impact on overall economic performance.

“It is only about 0.2% of Northern Ireland’s overall GDP, which is about £50bn,” he said.

“However, if Northern Ireland’s growth in GDP this year is well under 1% – and this is quite likely – that would be equivalent to a quarter of economic growth.”

Stuart Anderson, from the NI Chamber of Commerce, said the US was a really important market and called on the UK government to “respond really, really clearly” after Wednesday’s announcement.

He added that could get “challenging” if the EU and UK respond differently.

US tariffs could have a more profound effect on the Republic of Ireland’s economy.

Among EU countries, Ireland is the most reliant on the US as an export market.

In 2024, almost a third of the country’s total exports were to the US – worth €73bn (£61bn).

President Trump has previously indicated his discontent with the scale of manufacturing by US pharmaceutical firms in Ireland.

In the Irish parliament, the Taoiseach (Irish Prime Minister) Micheál Martin said investors in Ireland are already “pausing decisions” to see how the tariffs issue play out.

He said the EU will take a “strategic response” and it will be important that any counter-measures did not compound the problems.