Donald Trump is preparing to engage in a potential new trade conflict with the United Kingdom, focusing on tariffs during upcoming negotiations set to start soon after his inauguration in January. Industry insiders express concern that tariffs could be imposed on wines and spirits, with new charges expected in the next 18 months. This follows a history of tariff disputes between the two nations, including a previous 25% tax on whisky and other spirits imposed in 2019, which was later suspended for five years.

The reinstatement of these tariffs could significantly impact the UK’s Scotch whisky market and increase prices for American liquors in British pubs. For example, a Jack Daniels and Coca-Cola could see price hikes of over 20%. Miles Beale, CEO of the UK’s Wine and Spirits Trade Association, voiced fears that the US might target their market again, urging the UK government to act promptly to advocate for the elimination of these tariffs.

The former president has suggested that he might use these tariffs as a negotiation tactic, indicating they could serve a dual purpose of raising revenue and addressing trade deficits. He has also selected Howard Lutnick, a Wall Street executive, as his Commerce Secretary, a position that would place him in charge of tariffs.

The prior tariff regime caused the Scotch industry to suffer a loss of £600 million in exports to the US. In 2021, Scottish businesses managed £978 million worth of whisky sales in the US market. The Scotch Whisky Association has called for zero-tariff arrangements to continue, emphasizing the importance of maintaining robust trade relationships.

Britain’s Department of Business and Trade has highlighted its hopes to ensure key industries, including financial services and pharmaceuticals, remain tariff-free, with comprehensive strategies in place to negotiate terms favoring the UK in the trade discussions.

The potential trade challenges coincide with Trump’s intent to use trade policies as diplomatic tools, suggesting a need for close monitoring and strategic planning as both nations navigate these complex negotiations.