In November Donald Trump became the first republican to win the popular vote in two decades and, as a result, several industries are concerned about the coming four years – particularly the booze business.
Trump’s America-first approach means he wants to end inflation and bring industry back to the US, which points to significant import tariffs. Despite some economists suggesting that tariffs can contribute to inflation, during his first stint in charge Trump slapped taxes on the imports of Scotch whisky between October 2019 and March 2021, costing £600m in exports, according to the Scotch Whisky Association. These tariffs are next due to be reviewed in June 2026.
Scottish first minister John Swinney said in the wake of the US election: “The Scotch whisky industry has had a very difficult experience with tariffs in the past.
“I want to do everything we possibly can to avoid those tariffs, which will require engagement with the UK government, who will have to, with our support, argue strongly against tariffs that could be an obstacle to the trade for Scotch whisky.”
Trump’s return is similarly worrying for other beer, wine and spirits producers across the EU as, prior to the election, the now president warned of a 20% import tariff to the US on foreign goods, which is likely to involve a significant portion of the drinks industry beyond just Scotch. Trump also previously warned of a 100% import tax on champagne, which was never implemented, and has hinted at a blanket 25% tariff on Mexican imports, which is potentially disastrous for tequila’s largest export market.
Domestically, several US spirits brands also expressed their concerns to Drinks International as retaliatory tariffs would almost certainly be slapped on US products entering Europe should Trump pull the trigger once again.
Pros and cons
Dan Gasper, founder of brand incubator The Ardent Company based in California, has mixed feelings about the news. “There are various pros and cons across the drinks landscape, from our perspective,” Gasper told Drinks International. “Obviously for American whiskey businesses that are predominantly selling in the US it'll be really useful. But then less positive for international ones. “For some of the craft spirits in our portfolio there might be some upside. It’s been a pretty gloomy outlook for craft spirits generally, but if suddenly your competitors start to cost a bit more from international markets there’s an opportunity there.
Yet inversely, it makes it very difficult for independent brands coming to the US."
Gasper admitted that even prior to the election result he had been warning foreign craft spirits brands that 2024-2025 is not the time to launch in the North American market.
“Obviously the domestic market here is still enormous,” he added. “But even if your exports are 20% or 30% that can be scary, especially against the current headwinds that spirits face.”
Another concern for the domestic industry is Trump’s mass deportation plans, which will inevitably put strain on the US hospitality sector as Brexit did in the UK, but could also be problematic for the US wine business, which relies on foreign workers at harvest time.
The industry will know a lot more in the coming weeks about what the next few years will entail, but it looks as though the premium spirits industry in particularly may be heading for a significant period of hardship.
