Whisky and salmon are two of the largest exports from the UK so while higher tariffs are unwelcome, these premium Scottish products are well placed to weather the storms. Scottish salmon is the best in the world, and America doesn’t farm its own, so demand from the US is likely to continue. Similarly, Scotch whisky is unique to Scotland, and while America produces its own rye whisky, it’s a completely different product, so demand for Scotch, particularly high-end brands, is likely to remain.

After the last industry tariffs were imposed by the US, Scottish producers shifted their focus to far east markets, which are prepared to pay a high price for a premium product. As a result, whisky producers are now taking a portfolio approach to their exports. Popular brands such as Johnnie Walker are also branching out into experiential marketing for affluent tourists, many of whom come from the US and purchase goods to take home.

Many suppliers of whisky have already moved supplies to the US in anticipation of higher tariffs, and improved flight connectivity between the US and Scotland means salmon suppliers can ensure super-fresh, high quality produce commands a premium price in the US.

As higher tariffs come in, we are likely to see some suppliers pivot more towards far east markets, but if the current situation escalates to a global trade war, it may prove tricky to get the balance of exports right. The cost of higher tariffs is likely to be passed on to the customer to protect profit margins, so a strong brand is essential to command the highest price. Ultimately, it’s likely to be the consumer that loses out as prices increase.

Oversupply may also become a concern, as the practical implementation of tariffs will be complex, leading to potential delays of goods entering the US. The additional administrative burden for businesses may lead some to turn their back on the US altogether, potentially creating a market imbalance and increased competition.

It’s possible we may see the US row back on these tariffs. This has happened before, although this feels like a different level of economic warfare. Only 10% tariff on UK exports feels like a result in the scheme of things, however if this becomes an all-out trade war, whisky markets could be hit hard, possibly leading to a pause of production and staff lay-offs. Producers who have invested significant amounts in the latest production technology and experiences for tourists may struggle to recoup their money if a trade war hits.

Where there is no alternative but to pay tariffs, rejigging the supply chain to legitimately reduce the value of consignments could help reduce the calculated customs duty, but this might not work for every business model or tax structure, so detailed analysis to map the impact of changes will be key.

Consumer sentiment could have a significant impact too, as if affluent US tourists no longer feel compelled to visit Scotland or purchase our goods this could hurt our economy.