Trump Tariffs Threaten UK Alcohol Industry with Major Export Losses

The UK alcohol industry is facing significant challenges following the introduction of new US tariffs on 2nd April 2025, announced by President Donald Trump. The measures, dubbed "Liberation Day" by Trump, impose a 10% tariff on imports from the UK, raising fears among Welsh and Scottish whisky producers and craft breweries of substantial export losses to the US, a key market valued at £1.6 billion annually for British beverages, spirits, and vinegar.

Penderyn Distillery, a Welsh whisky producer, generates up to 10% of its £23 million yearly sales in the US. Chief executive Stephen Davies expressed concern that the tariffs will ultimately harm consumers by reducing choice, drawing parallels to Canada’s restricted import market. The distillery previously gifted a bottle of Penderyn Independence to Barack Obama in 2014, highlighting historical ties now strained by trade barriers. Scotch whisky, accounting for £913 million of the UK’s alcohol exports to the US, faces a severe impact.

Stephen Davies, Chief Executive at Welsh Distillery Penderyn

The Scotch Whisky Association (SWA), representing an industry that supports 66,000 UK jobs, voiced disappointment over the tariffs. An SWA spokesperson noted the UK government’s ongoing efforts to negotiate with the US administration, advocating for a resolution to maintain mutually beneficial trade. The US market represents about a quarter of total UK food and drink exports, with Scotch whisky comprising roughly 2% of all UK exported goods.

The tariffs are part of a broader US policy targeting steel and aluminium imports, prompting retaliatory measures from trading partners. The EU has planned a 50% tariff on American whisky starting 1 April, escalating tensions further. Davies highlighted the complexity of US liquor laws, varying by state, as an additional hurdle for exporters adapting to the new trade environment.

Other UK alcohol sectors, including beer and gin, are also affected. The US accounts for 21% of UK malt beer exports and 18.6% of spirits exports beyond whisky, according to the National Farmers’ Union. While some craft breweries like Samuel Smith’s have loyal US followings, rising costs may force consumers to opt for cheaper alternatives. The industry now braces for potential price hikes and reduced market access, with businesses on both sides of the Atlantic sharing the economic burden as Trump’s trade strategy unfolds.