A feeling of déjà vu is gripping the Scottish whisky industry, as the potential for fresh tariffs from the rapid-fire Trump administration may be closer than we expect.
The last time the US – the leading importer of whisky – imposed tariffs, it was part of the now infamous 2019 dispute between Boeing and Airbus.
The whisky industry found itself caught in the crossfire, suffering £600m in losses over 18 months. It was a stark reminder of how external forces beyond our control can dictate our fortunes, and showed waiting for favourable conditions is not a strategy.
This time, as trade policies shift unpredictably, scotch whisky producers must move to protect their market.
Established vs new markets
We’re living in a world with ever more economic hurdles, generously provided by the compounding impacts of Brexit, Covid and the war between Ukraine and Russia.
Distilleries are now navigating a fine balance between consolidating presence in established markets, while exploring new opportunities to build market resilience.
The US has historically been and still remains a major focus for exports. In Kingsbarns Distillery’s experience, 10% of our overall sales come directly from across the pond.
But the uncertainty surrounding tariffs highlights the need for diversification, to ensure distilleries can weather any incoming economic storms that may be on their way. At Wemyss Family Spirits, we’re already expanding into key whisky markets to ensure we aren’t over-reliant on any single region.
Selective expansion is key. We cannot afford to spread ourselves too thin, but by identifying markets where appreciation for high-quality scotch is growing, we can build a sustainable, long-term global presence.
Emerging global opportunities
India is the big prize, home to a vast population of whisky drinkers, yet constrained by a 150% import tariff. Talks for a UK-India free trade agreement are ongoing, but progress is slow. A deal could be a game-changer for scotch whisky exports, opening significant opportunities for premium scotch to be exported to an expansive market.
Beyond India, other international markets are presenting exciting growth potential. We must also be mindful of emerging whisky markets across Asia, where demand for premium spirits is rising.
These challenges bring opportunities. By expanding market reach, strengthening partnerships, and improving digital infrastructure, distilleries can stay agile and globally connected.
While the uncertainty of tariffs is unsettling, it’s worth noting scotch whisky is a product that simply cannot be replicated in the US.
Trump’s trade policies have historically focused on taxing goods that can be produced domestically, and scotch whisky, by definition, does not fall into that category.
Whether this will afford the industry some protection remains to be seen, but history shows we cannot afford to be complacent.
Smaller independent players must be strategic in how they choose to allocate resources, and we can’t be everywhere at once. But by prioritising the right markets, we can ensure long-term, sustainable growth in an increasingly complex global landscape.
William Wemyss is the founder and chairman of Wemyss Family Spirits
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