The Government has dismissed reports the EU could block goods entering Northern Ireland from the rest of the UK.
Simon Coveney said there may be "limited checks" on goods coming from Great Britain into the region because there is an agreement to prevent the need for physical infrastructure on the Irish border.
The measures were envisaged to stop goods passing from England, Scotland or Wales into the Republic of Ireland via Northern Ireland tariff-free if no wider agreement is struck between the EU and UK.
"There is no blockade proposed," Mr Coveney said. "That is the kind of inflammatory language coming from Number 10 which is spin and not the truth."
How to keep the Irish border open has bedevilled negotiations on withdrawal from the EU.
in an incendiary article for The Telegraph, Prime Minister Boris Johnson said Brussels was threatening to use an "extreme interpretation" of the Northern Ireland Protocol to impose "a full-scale trade border down the Irish Sea" that could stop the transport of food from Britain to Northern Ireland.
The British government's new UK Internal Market Bill has immediately run into controversy over its impact on talks with the EU and on international treaties.
It could rewrite parts of the Brexit withdrawal agreement relating to the provisions around all-Ireland trade.
Mr Coveney told the BBC's The Andrew Marr Show a post-Brexit trade deal was still possible.
He said: "The British Government is behaving in an extraordinary way and British people need to know that, because outside of Britain the reputation of the UK as a trusted negotiating partner is being damaged."
At present the UK is part of the European single market, with jointly agreed regulations and standards across the continent.
Post-Brexit, the UK Government wants to continue to have a joint market across England, Scotland, Wales and Northern Ireland, known as an internal market.
That means regulations around matters like food standards and animal welfare being set in the UK instead of Brussels.
Northern Ireland had been due to remain part of the bloc for trade purposes unless a wider commerce deal was struck with the EU.
That means Northern Ireland must continue to follow the standards of Brussels to avoid tariffs on all-island trade and keep the free-flowing border in goods with the Republic of Ireland, its EU neighbour, open.
The Irish Government has said the British Government's plans represents a "serious risk" to the peace process amid acrimony in the negotiations.
Mr Coveney said: "Both the British and Irish economies are going to be damaged significantly and that will be a significant failure of politics not anything else."
He added: "It is possible to get agreement, it will probably be a basic pretty thin agreement."
The European Commission has given the UK until the end of the month to drop legislation enabling ministers to override the provisions in the Brexit Withdrawal Agreement relating to Northern Ireland.
Following a stormy meeting in London on Thursday, the commission warned the UK was putting trade talks at risk and said it would "not be shy" of taking legal action.
The British prime minister's official spokesman, however, reiterated the government's position that the provisions in the UK Internal Market Bill remained "critical" to the preservation of the Northern Ireland peace process.