Distillers on edge as Trump prepares to unveil UK trade deal
The eyes of Britain’s distillers will be focused on the White House at 3.00 pm today when President Donald Trump is set to unveil an American trade deal with Britain. A breakthrough could ease tariff tensions and bring stability to the UK’s vital spirits trade with its biggest overseas customer.
It is not known yet whether he will give details or confirm that there is an outline framework with the nitty-gritty to be ironed out over the next few months, but either way, it is likely to come as a huge relief to scotch and gin companies.
The United States is the largest export market for Scotch whisky and was worth £971 million last year, which was 9.1% lower than in 2019. Since then, sales have been on a roller-coaster ride as home consumption soared only to be followed by a downturn as American consumers closed their wallets in the face of inflation and began trading down.
Stability more valuable than immediate sales boost
A trade deal will not immediately boost spirits sales to the US, but it will provide some certainty and allow a stable backdrop against which to plan.
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As it stands before Trump’s announcement, British spirits face the blanket 10% tariffs he plans to levy on all imports to the US.
25% Scotch tariff still a threat
Without a trade deal, Scotch also faces a 25% levy as part of the President’s campaign to punish countries that do not treat America in what he regards as a “fair” manner. That is in abeyance for 90 days.
In Trump’s first term in the White House, distilleries were hit with a 25% tariff specifically on single malt Scotch whisky between 2019 and 2021. That is reckoned to have cost the industry up to $6m a day in lost sales.
Bourbon makers also await outcome
A deal will also be welcomed by Bourbon distillers in Tennessee and Kentucky, who will have been anxious about facing retaliatory penalties in the UK, one of their largest markets.
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