Scotch whisky distillers look to minimize effect of Trump tariffs

Scottish whisky is a multi-billion dollar export industry, with the U.S. its most important market. But concern is growing among producers after President Donald Trump slapped a 10 percent levy on all UK exports.

The drinks giant Diageo, whose brands include Johnnie Walker and Bell's, has already scrapped a key sales target amid growing uncertainty over U.S. tariffs.

The United States is the largest market for Scottish whisky, buying around $1.2 billion worth of the tipple each year. For Scotland, it's a major export.

There are more than 150 distilleries in Scotland. The main specialist whisky retailers in Edinburgh stock hundreds of different brands, some of them selling for thousands of dollars.

Now the industry, which supports around 60,000 jobs, is trying to assess just what impact Trump's 10 percent tariff on UK imports will have.

Many of the distilleries are in remote rural regions, like the Nc'nean Distillery in Drimnin on the sparsely populated Morvern peninsula, western Scotland. It's one of Scotland's newest distilleries, specializing in carbon-free organic whisky.

Nc'nean's founder Annabel Thomas entered the key U.S. market 18 months ago with the aim of generating a third of the company's revenue in America. But that was before the 10 percent levy was announced.

"That would cause us to think about how much investment we put into the U.S., but it certainly wouldn't stop us selling into it as a market," she said. "Anything more than that and I think we'd... that would cause us more pause for thought."

Painful experience

The industry knows from past experience how painful tariffs can be. In 2019 the U.S. imposed a 25 percent tariff on scotch whisky as part of a broader dispute with the European Union. Estimates put lost revenue at almost $800 million.

UK Prime Minister Keir Starmer has decided against retaliating with counter tariffs on U.S. goods for the moment, hoping to negotiate a better deal.

Back in Edinburgh, American tourist Matt Cardosa is looking to buy some scotch to take home with him, but says he will still drink the whisky, even if prices go up.

"Yes, yes, most definitely," he said. "If it's good enough whisky, I'll pay the 10 percent on it."

The Scotch Whisky Association expressed dismay at the 10 percent tariffs but has backed the government's softly-softly approach. The industry is hoping for a political solution – while pressing the government for assistance if the tariffs continue.