Trump tariffs could be a blow for Scotch whisky trade

United Kingdom | Tariffs on Scotch whisky exports to the US have been called “disappointing” by the Scotch Whisky Association (SWA) and could have a wide impact on the industry. Announced on 2 April by President Donald Trump, the UK is now facing a 10 percent blanket tariff on the exports of its goods to the United States.

A spokesperson for the SWA said: “The industry is disappointed that Scotch whisky could be impacted by these tariffs. We welcome the intensive efforts by the UK Government to reach a deal with the US administration, and we continue to support this measured and pragmatic approach towards a mutually beneficial resolution.”

The US has long been Scotch whisky’s biggest market by value, says the SWA, and was worth GBP 971 million (USD 1.3 billion) in value sales to the industry in 2024.

This is not a déjà vu

The new tariff rate also comes whilst the industry is still recovering from the 25 percent tariff that was imposed by President Trump during his first term and saw Scotch whisky firms lose a total of GBP 600 million (USD 790 million) in lost exports. The tariff was paused by the Biden administration.

Local distillers have highlighted the damaging impact the Trump tariffs could have on sales, but also on wider profits from whisky tourism. If tariffs fuel inflation or restrict consumer spending in the US, this could lead to fewer golf travellers, fewer distillery visits and a knock-on effect on local jobs.

Diageo, the world’s largest spirits manufacturer and owner of Johnny Walker whisky, already warned of a potential hit in February. Analysts suggested that the company will see a roughly GBP 76 million (USD 100 million) hit to its profits – about 2 percent of earnings – from the 10 percent tariffs, before mitigating actions.

Don’t hold your breath

Freer trade with the US matters for some exporters, including the British car industry and the Scotch whisky industry. But economists have pointed out that any wider gains were never going to be substantial for the economy – a mere fractions of a single percentage point over a decade. Freer trade with Europe would have a far greater economic impact on the UK.

Besides, any UK-US deal may include conditions which have nothing to do with business and which the UK Government may be reluctant to accept. Sources close to US Vice President JD Vance were quoted as saying he will insist that Britain must repeal hate speech laws on LGBTQ+ people as the price of an agreement.

Martin Kettle, a commentator for the UK newspaper The Guardian, wrote on 17 April: “For Britain, a free trade agreement with Trump’s US can only be fundamentally defensive. It should be seen as a way of protecting British trade interests. It is not the key to unlocking UK prosperity. In other words, it would be tactical not strategic.”