A growing dispute over post-Brexit trade deals for Northern Ireland risks seeing the government abandon parts of that deal. If so, could this trigger a trade war that could see households and businesses pay an unfortunate price?

European Union officials have repeatedly warned of “serious” consequences if the UK rolls back part of the Northern Ireland protocol.

Last November, Irish Foreign Minister Simon Coveney warned that the whole Trade and Cooperation Agreement (TCA) – which exists to guarantee duty-free and quota-free trade between the EU and the UK – depends on the UK’s compliance with the protocol.

More recently, however, as the war in Ukraine has both heightened cost-of-living concerns and increased cooperation between the EU and the UK, Mr Coveney has struck a more conciliatory tone, saying the EU wants to seek solutions first. But he warned that any unilateral action by the UK could mean “a very difficult summer”.

And ultimately, that means there is a risk that some or all of the TCA will be removed unilaterally by the EU, but not quickly. This would allow the EU to impose tariffs on products made in Britain.

In most cases, such action requires up to a year’s notice and an interim arbitration process.

The EU has the option to pull other levers in the meantime, perhaps by restricting the entry of British fishing vessels into EU waters, for example.

Brussels has already been investigating interim measures, after claiming that Britain’s action to delay border formalities last year breached protocol. He then suspended that process after agreeing to negotiations – but he could decide to resume.

And the fallout from such an action could be painful.

Economists warn that the EU could, as has happened in trade disputes with the United States, target politically sensitive products for tariffs to maximize the impact – salmon from Scotland, for example.

A total of £372million of Scottish salmon went into the EU last year, supporting thousands of jobs.

Alternatively, the EU could focus its action on industries in the so-called red wall seats, in parts of north-east England and the Midlands that swung from Labor to Conservative in the last election. Some of these areas are disproportionately dependent on block custom.

If all products made in the UK faced the same tariffs as those from other countries outside the EU, agricultural products could face a typical 10% levy – with dairy attracting up to 35% – when sold by the block.

But any tariffs imposed on British goods would lead to higher bills for European customers, something they wouldn’t thank Brussels for.

This, together with the requirement that any response must be “proportionate”, makes most economists think such action would be selective.

The EU could speed up bureaucracy to make life harder for companies trying to sell into its market. As things stand, three-quarters of North East England exporters say post-Brexit paperwork makes it more difficult to sell to the EU, a Chamber of Commerce survey shows, with levels export down by more than a tenth compared to 2019 .

The UK could theoretically respond to any retaliatory action by imposing its own tariffs. Such a levy would make it even more difficult for European producers to compete in the United Kingdom; they’ve already seen their sales drop here since Brexit, and exports from countries like Germany are already on the verge of a reversal.

But it’s an option Britain has so far played down – after all, it could in theory see extra charges on European-made cars and higher prices for basic goods, at a time when UK households are already caving in to the pressure of higher bills.

As things stand, economists at the London School of Economics say changes before Brexit and after have seen the price of food imported from the EU rise by 6% in 2020 and 2021.

An all-out trade war could deal a mutually crippling blow when the EU and UK economies are already highly vulnerable. Brexit Opportunities Minister Jacob Rees-Mogg has described such an eventuality as an “act of self-harm”, perhaps betting the EU won’t take the risk.

Alternatively, Brussels could decide that launching the retaliatory process is necessary to exert leverage and push the UK to concede in the settlement of the dispute over Northern Ireland.

Almost five years after the referendum, the wrangling over how Brexit will work is far from over.