By Richard Thomas
In a move that had probably been negotiated beforehand, President Trump announced the reciprocal elimination of whiskey tariffs between the US and Britain following the state visit by British monarch Charles III.
The story of whiskey’s place in trade wars started by President Trump dates back several years. Trump’s first trade war started in the middle of his 2017-21 term, when he levied tariffs on EU metals imports. The EU retaliated with tariffs of their own, one of which targeted American Whiskey. At the time, the measure was perceived as putting pressure on Republican Senate leader Mitch McConnell, the senior Senator from Kentucky, as the Kentucky Bourbon industry produced over 95% of all whiskey made in the US.
Britain did not leave the European Union, effecting Brexit, until 2020, so they were part of the whiskey trade war from those opening shots. However, upon leaving the EU the British also abandoned the import penalty on American bourbon and other whiskeys. Although a new trade deal was negotiated with Britain early in 2025, that deal was not for a resumption of largely free trade, but instead placed a 10% duty on all imports from Britain. The result was a tax increase on the trade in bourbon, Scotch and related products, as there were no taxes on them prior during the few years between Brexit and the US-UK 2025 trade deal.
This hit both industries hard, resulting in a sharp decline in Scotch and bourbon exports. However, the British undoubtedly suffered more, as the US is by far the world’s largest and most lucrative market for whiskey exports. Scotch exports to the US fell by 15% (by volume) last year. Estimates place the duties at costing the Scottish economy £4 million per week.
Despite reporting that made it sound like Trump was charmed into making the concession by King Charles III, British officials have been lobbying for a return to the zero duty regime all through the last year.
Although the US exports a much smaller amount of actual whiskey to the UK, a much more important whiskey-related export to Britain was also subject to the taxes: barrels. The Scotch industry uses old bourbon barrels, either as is or refashioned into hogsheads, as its primary source of maturation cask. That reliance makes Scotland the world’s largest consumer of ex-bourbon barrels, but they also often reuse those barrels two, three or even four times.
Underscoring that the barrel trade with Britain is more important to Kentucky that the sale of bottles there, Kentucky Distillers Association (KDA) President Eric Gregory responded to the news by stating, “This action restores reciprocal, tariff-free trade between our historic spirits and is especially important for Kentucky, as Scotch distillers have long been the largest export market for Kentucky’s used Bourbon barrels. ”
Under-reported was that at the same time Britain dropped tariffs against American whiskey, it did so generally. So Irish, Japanese, Canadian, French and other whiskies are now all tariff-free for import into the UK.
