Whiskey wars: How bourbon and Scotch could become Trump’s bargaining chips in British trade talks

New tariffs could be imposed on wines and spirits under the president-elect’s plans to boost the US economy

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Donald Trump could ignite a whiskey war with the UK as part of negotiations over tariffs after he takes office in January, industry insiders fear.
The US president has pledged to impose blanket tariffs on all foreign imports of between 10 and 20 per cent, but the UK could be given an exemption.
Trade talks are set to begin imminently, and Cabinet ministers have warned a full-scale trade war could wreak havoc on the economy in both the UK and US.
Industry insiders have told The Telegraph that one area of negotiation is likely to include new tariffs on wines and spirits, which are due to take effect in 18 months.
A 25 per cent tariff on American and British exported spirits was imposed by both countries in 2019, in response to a long-running dispute over Boeing and Airbus.
Both sides later agreed to suspend the levies for five years from 2021, but they will return in June 2026 unless a new agreement can be reached between London and Washington.
Businesses fear Mr Trump could agree to reimpose the tariffs as part of trade talks with the UK, harming the Scotch whisky industry and raising the cost of American spirits for British consumers.
The whiskey war could see the price of a Jack Daniels and Coca-Cola increase by more than a fifth in British pubs, while treasured Scotch brands would see exports plummet.
Miles Beale, the chief executive of the UK’s Wine and Spirits Trade Association, said: “We are worried that the US will be tempted to pick on wines and spirits.
“We are asking the UK Government to get in there early and make the case for getting rid of the tariffs altogether, and not give any opportunity for a second Trump administration to reapply them.”
Mr Trump has suggested that tariffs in the US could eventually become a replacement for income tax.
On the campaign trail, he repeatedly praised William McKinley, a 19th-century US president who used tariffs to raise revenue and shape foreign policy, and he has nominated Howard Lutnick, a Wall Street chief executive, to be his Commerce Secretary with responsibility for tariffs.
Mr Lutnick, who also serves as co-chairman of the Trump transition team, has described the threat of blanket tariffs as a “bargaining chip” that will force other countries to the negotiating table on trade.
During the 18 months the transatlantic whiskey tariff was previously in place, the Scotch whisky industry in the UK lost £600 million in exports to the US.
Last year, Scottish businesses sold £978 million of whiskey in the US – the equivalent of 127 million bottles. Wine and spirit exports together accounted for £1.4 billion in trade.
A spokesman for the Scotch Whisky Association, which represents distillers, told The Telegraph: “Our world-class whiskies have benefited from zero-tariff trade for over a quarter of a century.
“It is in all our interests that our collective energy is focussed on growing our sectors, creating jobs and investment.”
The Department of Business and Trade has drawn up a list of priority industries it will push to remain tariff-free after Mr Trump takes office.
They include financial services, tech companies and pharmaceuticals.
A Whitehall source said Britain would also push to scrap the existing 2.5 per cent tariff on cars exported to the US, but officials have little confidence of success.
Mr Trump’s tariff plan represents an unprecedented attempt to use trade barriers as a diplomatic tool.
He has proposed blanket tariffs of 60 per cent on Chinese imports, which American retailers including Walmart have warned will increase the price of goods for consumers.
Mr Trump’s allies have suggested that the UK may be forced to choose between a closer trade relationship with Europe or with the US.
Jonathan Reynolds, the Business Secretary, suggested earlier this week that the Government may align more closely with the EU if Mr Trump starts a trade war with China, because the UK would be “exposed” to tariffs on both sides.
“Clearly if there are things that we’re offered or asked to do that would result in an adverse relationship on the European side, we’d have to weigh the consequences of that,” he told a House of Lords committee.
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