BLUF: President Donald Trump’s early-May announcement of a “major” trade deal – widely expected to be with the United Kingdom – could be a game-changer for Scotland’s whisky makers. Eliminating tariffs and easing trade barriers would boost Scotch producers and exporters, while offering consumers a smoother, potentially cheaper dram in the U.S. market.
A Trade Boon for Scotch Producers and Exporters
Trump’s tease of a deal with a “big, highly respected country” has industry observers convinced the partner is Britain, home of Scotch whisky. For Scotch producers, a U.S.-UK trade agreement would mark a welcome reprieve from recent tariff tensions. The U.S. is the single largest market for Scotch by value – nearly £1 billion in exports annually – so even modest tariffs can have outsized effects on distillers’ bottom lines. They learned this the hard way during the 2019–2021 trade spat, when a 25% U.S. tariff on single malt Scotch (as part of an aerospace dispute) caused exports to plunge by a quarter, costing over £600 million in lost sales. That painful episode, still fresh in mind, means producers are acutely sensitive to any new trade barriers.
In April 2025, the Trump administration imposed a fresh 10% tariff on many countries, rattling whisky makers once again. The Scotch Whisky Association (SWA), representing distillers large and small, didn’t hide its concern – noting the industry supports 66,000 UK jobs – and “welcomed the intensive efforts” by London to negotiate a resolution. A bilateral trade deal would likely eliminate U.S. tariffs on Scotch, immediately lifting the 10% duty threat. For producers, that means relief from having to absorb costs or cut into margins. Exporters would regain confidence to ship bulk orders knowing sudden tariff hikes won’t upend their contracts. “Return to zero-for-zero tariffs” is the rallying cry, and a U.S.-UK pact would essentially achieve that for whisky. Industry analysts say it could even create a more level playing field against other spirits. For example, the UK’s new trade deal with India – announced the same week – will gradually slash India’s 150% whisky tariff in half (to 75%, then 40%), a change the SWA hailed as “transformational” for Scotch exports. While U.S. tariffs on whisky have never been anywhere near that extreme, the principle is the same: lower barriers equal higher exports. Freed of tariff burdens, Scotch distillers can invest more in production and meet anticipated demand growth without fear that geopolitics will shut their biggest customer out.
Importantly, a trade agreement could also address technical barriers that frustrate exporters. Streamlined customs procedures, mutual recognition of standards, or agreements on labeling rules for whisky would all help smaller distilleries in Scotland reach U.S. distributors more easily. Right now, many craft Scotch producers have warily watched the trade turbulence and held off expansion in the U.S. market. A clear, stable deal would give them the green light to forge ahead. All told, Scotch exporters see a U.S.-UK deal as a chance to turn the page on trade wars, locking in secure access to a lucrative market for years to come.
Cheaper Drams for Consumers
The benefits wouldn’t only flow one way. Whisky enthusiasts and consumers stand to gain significantly if Scotch is included in a U.S.-UK trade deal. Tariffs on imports are effectively a tax that often gets passed along to the buyer. Distributors and retailers can only absorb so much – as one Welsh whisky executive noted, a 10% tariff adds about $5 to the price of a bottle of mid-range single malt, and “there aren’t many ways for us to absorb it”. The likely outcome is higher shelf prices for consumers. In the absence of a deal, Americans would be looking at rising Scotch prices or limited availability, especially for smaller brands. Penderyn (a whisky distillery in Wales) warned that if trade barriers persist, it means “less choice for Americans and that’s a bit sad” as importers scale back offerings.
Fortunately, a U.S.-UK agreement would remove this added cost. American consumers could see Scotch whisky prices stabilize or drop from today’s levels. A bottle that might have crept up above a key price threshold could become affordable again, keeping Scotch competitive with bourbon and other spirits. More importantly, the whisky selection on store shelves might widen. When tariffs threatened to cut off profitability, some importers slowed orders of niche single malts or limited-edition Scotch releases. With a deal in place ensuring tariff-free Scotch, U.S. retailers can confidently stock a broader range of distilleries, knowing that sudden duty spikes won’t make those products unsellable. Greater variety – from peaty Islay malts to small-batch Speyside whiskies – would delight aficionados and newcomers alike.
Consumers in the UK could feel some indirect benefits too. A trade deal is a two-way street, and the UK would likely reduce barriers on American goods in return. The UK had previously levied tariffs on American whiskey during earlier disputes (though those were suspended in recent years). A fresh agreement could cement zero tariffs on bourbon and Tennessee whiskey entering Britain. While Scotch is the focus, whisky drinkers in the UK might enjoy lower prices on their favorite U.S. spirits as part of the overall deal. In short, whisky lovers on both sides of the Atlantic have reason to raise a glass: harmonious trade relations mean more drams for your dollar (or pound).
Other Potential Trade Partners to Watch
If Trump’s surprise trade deal weren’t with the UK, who else could it be? The White House has hinted this would be the “first of many” deals, suggesting other countries are in the queue. Below we rank the other likely candidates based on recent geopolitical and trade signals:
- India – A huge market in the wings. India’s inclusion on Trump’s trade agenda would make sense for several reasons. It’s the world’s fifth-largest economy and has been seeking closer trade ties with Western partners. In fact, Britain’s own new pact with India this week (the UK’s largest post-Brexit deal) is set to dramatically cut tariffs on Scotch whisky – indicating India’s willingness to open its spirits market. The Trump administration has also engaged India: in February, Trump and PM Modi reached a smaller agreement to reduce India’s steep import duty on American bourbon (from 150% to 100%) as a goodwill gesture[1]. A broader U.S.-India free trade deal would be ambitious, but Trump himself teased “potential” deals with India were under review. Given India’s strategic importance and its historically high trade barriers (including on whisky), many see it as the next big prize. Any movement here would be closely watched by Scotch exporters, since greater India-U.S. trade flows could further pry open India’s spirits market – a long-term win for whisky makers globally.
- Japan – Strengthening a longtime alliance. Japan, the world’s third-largest economy, is another prime candidate for a Trump trade deal. The U.S. and Japan already negotiated a limited trade agreement in 2019, but a more comprehensive deal has remained elusive since the U.S. withdrew from the Trans-Pacific Partnership. Recent signals suggest this might change. Trump officials reportedly prioritized talks with Japan (and other Indo-Pacific allies) in hopes of securing quick wins and pressuring China. Japan would be a “safe” choice for a major deal: it’s a stalwart U.S. ally and major trading partner, with existing low tariffs on many goods. For the whisky sector, a U.S.-Japan deal could facilitate smoother flow of not just Scotch but also Japanese whisky (increasingly popular in the U.S.) and American whiskey into each other’s markets. Japan’s inclusion in Trump’s “first of many” hints makes it a highly likely contender if the UK deal hadn’t materialized first.
- South Korea – Expanding an existing pact. South Korea already has a free trade agreement with the U.S. (in fact, Trump renegotiated the KORUS FTA in 2018). So why is it on the list? Because there’s room to deepen and update trade ties further. Trump mentioned “potential” deals with South Korea alongside India and Japan, suggesting Seoul might offer additional concessions or sector-specific agreements to placate Washington’s demands. South Korea is a significant whisky market in its own right – one of the largest importers of Scotch in Asia – and it imports a lot of American goods too. A new deal (or an expanded KORUS) could, for instance, further lower Korean tariffs on bourbon and Scotch or address regulatory quirks, benefiting spirits companies. Geopolitically, striking another agreement with South Korea would reinforce the U.S.-Korea alliance at a time of regional tensions, which the Trump administration could tout as both an economic and strategic win.
- Taiwan – A wildcard candidate. Though not officially confirmed, Taiwan has emerged in speculation as a possible trade partner in Trump’s queue. Analysts noted an unusual 8% surge in the Taiwanese dollar in early May, interpreting it as investors betting on a U.S.-Taiwan trade deal rumor[2]. Taiwan is a major trading economy and a democracy, making it a sympathetic partner for the U.S. (and a move that would send a strong message to China). While formal trade negotiations with Taiwan can be diplomatically sensitive, the two sides have already deepened ties through the “U.S.-Taiwan 21st Century Trade” framework in recent years. For the whisky industry, Taiwan is a noteworthy market – it has one of the highest per-capita consumptions of Scotch in Asia and a thriving community of whisky collectors. Any U.S.-Taiwan deal might focus on technology or agriculture, but it could also ease the flow of alcoholic beverages. If this dark horse candidate comes through, it would signal a significant realignment in trade priorities, with likely positive ripple effects for high-end Scotch exports to Taiwan’s discerning consumers.
In summary, the Scotch whisky industry is watching these trade developments closely. President Trump’s promised deal “announcement” has put distillers on the edge of their barstools, hopeful that a new era of smoother transatlantic trade is imminent. If the UK is indeed the partner, Scotch producers can expect a welcome break from tariffs and a chance to significantly grow their U.S. sales. And if this is just the first of many deals, whisky makers may soon find friendlier markets in other countries as well. Trade agreements can be complex, but for whisky folks, the equation is simple: fewer tariffs means more Scotch flowing to the world, which is something worth raising a toast to.
Sources:
[1] https://www.reuters.com/world/us/trump-says-news-conference-be-held-thursday-about-major-trade-deal-2025-05-08/
[2] https://www.theguardian.com/business/2025/apr/04/uk-alcohol-industry-trump-tariffs-welsh-scottish-whisky-us
[3] https://www.reuters.com/world/india/india-uk-conclude-talks-over-free-trade-pact-pm-modi-says-2025-05-06/
[4] https://www.politico.com/news/2025/05/07/trump-poised-to-announce-trade-agreement-with-uk-00335094
