THE Labour Government has been urged to step in and negotiate with the US – with less than 17 months until the Scotch whisky industry is hit with damaging tariffs.
In June 2026, a five-year suspension on 25% tariffs which Donald Trump brought in during his first presidential term will automatically expire.
If nothing is done, that will mean hundreds of millions of pounds of lost revenue for Scotland’s whisky industry.
The tariffs previously came into effect on October 18, 2019 amid a trade dispute between the US and the EU over subsidies given to Airbus. The Scotch Whisky Association (SWA) reported a “stark” and immediate 25% drop in exports to the US for the final quarter of 2019.
In 2018, the total exported had been valued at more than £1 billion for the first time. In 2020, this fell to £729 million.
The tariffs were temporarily lifted by the Biden administration in March 2021, and a five-year suspension was brought in from June that year.
The 18-month period during which the tariffs were charged had a huge impact on whisky exports to the US, which were worth £600m – or more than £1m per day – less than they would have been without tariffs, according to SWA figures.
The SWA said previously that it fears “it will once again be collateral damage in a trade war not of its making without concerted action by the US and UK administrations to resolve the underlying dispute”.
Fears of tariffs on Scotland and the UK have prompted high-level discussions including between Trump and First Minister John Swinney. However, the risk of Trump imposing new tariffs may be smaller than him simply allowing previous ones to come back into effect.
SNP MP Graham Leadbitter, whose Moray West, Nairn and Strathspey constituency is home to one-third of all Scotch distilleries, called for the UK Government to ensure the 25% tariffs do not hit whisky next year.
He further highlighted the 10.1% increase in excise duty, which was brought in by the Tory government in 2023 and has since been found by the SWA to have actually cost the Treasury £298m by pushing producers to make less.
In her Autumn Budget, Chancellor Rachel Reeves ignored cross-party calls – including from the Tories – to cut the duty and instead said it would increase in line with inflation in February 2025.
Leadbitter said: “Westminster has the Scotch whisky industry over a barrel with a punitive tax regime that isn’t just affecting the industry, but the Treasury too.
“When the Tories hiked whisky duty, tax revenue raised by the industry fell by £300m. The sensible option, both for supporting Scotch whisky and Treasury receipts, would have been to cut whisky duty, instead the Labour Party raised it again.
“Economically illiterate moves like that are even more concerning now we’re facing the prospect of Trump tariffs which will limit sales of whisky in one of its most important markets.
“So far, Westminster has shown itself to be no friend of the whisky industry, but it can, and should, turn that around by lowering taxes at home and negotiating with the United States to prevent more tariffs.
“We’re fortunate in Scotland to be home to some of the finest whisky brands in the world. We recognise the economic benefits and soft power that comes with that, the rest of the world recognises it, it’s time now for Westminster to recognise it too.”
An SWA spokesperson said: “The industry looks forward to working in partnership with President Trump and his administration to build trade links which create jobs and investment in the US.
“We fully support the engagement the UK Government has had with the US administration, highlighting the investment the Scotch whisky industry already brings to the US economy and the value it adds to the US hospitality sector."
A spokesperson for the UK Government's Trade Department said: “There is huge appetite for our Scotch and other excellent Scottish whisky products in the US and all around the world.
“We share a special relationship with the US and will always support our whisky exports for years to come.”
