Tariffs on meat and dairy products can be prohibitive, and Icelandic meat and dairy products dominate the market. The market share of imported meat has been growing year-on-year, however, which can largely be credited to the growing tourism sector, as well as local demand for high-quality meat, particularly beef. In 2018, an agreement came into force between Iceland and the EU concerning reduced or eliminated tariffs, and increased tariff quotas on unprocessed agricultural products. As part of this agreement, Iceland dropped tariffs on more than 340 categories of unprocessed agricultural products from the EU, and reduced tariffs on more than 20 categories. Tariffs for U.S. agricultural products are around 30 percent, leaving U.S. products in a difficult position to compete with European products. There are also restrictions on importing raw or fresh agricultural products originating from outside of the EU. Meat, for example, needs to be frozen for thirty days prior to entering the country from non-EU countries.
Iceland’s adoption of EU product standards and regulations, such as food product labeling and requirement for products to bear the CE marking, can be considered a barrier for U.S. companies wanting to export to Iceland. Even though Iceland is not in the EU, Iceland’s membership in EFTA and the EEA means that there are generally no exemptions to these rules.
Logistics can be costly and time consuming, given the distance between Iceland and either the United States or continental Europe. Air freight is reliable and readily available, but expensive. Sea freight is available and cheaper, but it is less frequently available directly to and from the United States. Icelandic logistics company Eimskip sails a ship once per week to Portland, Maine. There are also two logistics companies that offer more frequent sea freight services between Iceland and Europe (connecting to Rotterdam, Hull, Aarhus, Bremerhaven, Aalborg, Torshavn, and Immingham), through which American exports can be directed when destined for Iceland.