Scotland’s iconic whisky industry faces a double blow as Donald Trump’s return to tariffs collides with a UK tax hike.
The SNP has demanded the Westminster Government reverse its 10.1% tax on Scotch whisky to shield the sector from fresh US trade penalties.
Donald Trump’s 10% tariffs are back, with fears they could mirror the last round which cost the industry over £600 million.
Scotch whisky producers have already been bruised by domestic tax rises, with Labour reinforcing Tory excise increases in last year’s Budget.
Sir Keir Starmer is now under pressure to stand by his pledge to support Scottish distillers “to the hilt” – a promise he made at InchDairnie distillery before the general election.
SNP MP Graham Leadbitter has called on the Labour Government to “honour your word” and reverse the whisky duty increase.
The Moray West, Nairn and Strathspey MP pointed to his constituency’s vital role in the sector, home to a third of all Scotch whisky distilleries.
In a letter to Chancellor Rachel Reeves, Leadbitter warned the combination of US tariffs and UK tax is “hammering” one of Scotland’s flagship industries.
He highlighted that Scotch whisky generated £7.1 billion for the UK economy in 2022, supporting over 40,000 Scottish jobs.
Research from the Scotch Whisky Association shows that the UK Treasury actually lost nearly £300 million in revenue after the Tories hiked whisky duty by 10.1% in 2023.
Despite Labour’s pre-election criticism of Conservative policy, the current Government has kept the tax in place, even increasing it.
One in five Scotch whisky bottles is exported to the United States, making the American market vital for producers.
The Scotch Whisky Association has said it is “disappointed” by the return of US tariffs, which disproportionately hurt Scottish exports.
Graham Leadbitter stressed that the industry is facing a critical moment and needs immediate support from the UK Government.
He called on Rachel Reeves to deliver on Labour’s commitment and remove the domestic tax burden as US tariffs take effect.
He warned that failing to act will hurt jobs, businesses, and Treasury revenue all at once.
The SNP are now using Labour’s own words to press home the case, reminding Ian Murray that he once accused the Tories of breaking promises to the Scotch whisky industry.
The renewed US tariffs are a stark reminder of how vulnerable Scottish exports remain in the face of global politics and domestic policy choices.
With Scotch whisky making up a quarter of all Scottish exports to the US, many are now watching Westminster to see if Labour will live up to its pre-election rhetoric.
The Scotch Whisky Industry said it was “disappointed” by the tariffs and, in his letter to Rachel Reeves, Mr Leadbitter, whose constituency is home to Speyside Malts and one-third of Scotland’s whisky distilleries, said:
“Dear Rachel Reeves,
“As you will be aware, Donald Trump’s tariffs will hammer Scottish businesses and consumers, but no industry more so than the Scotch Whisky industry.
“In 2022 alone, Scotland’s world class product generated £7.1bn for the UK economy supporting more than 40,000 jobs with one fifth of Scotch Whisky exports going to the United States. Scotch Whisky not only supports jobs, but it makes up a quarter of all Scottish exports to the US and when Donald Trump was last in office, his tariffs saw the Scotch Whisky industry lose more than £600m. These facts make it critical that Scotch Whisky is supported at this very worrying time.
“Prior to the General Election, Sir Keir Starmer said he would back Scottish producers “to the hilt” while Ian Murray accused the Tories of breaking their ‘promise to the Scottish Whisky Industry’ following their hike 10.1% hike. However, at your budget, not only did you reinforce the Tories’ whisky tax, you compounded the damage and delivered a further increase to whisky duty.
“Research from the Scotch Whisky Association showed that after the UK government increased whisky excise duty by 10.1% in 2023, revenue received by the Treasury fell by £298 million per year. Not only do these whisky specific taxes hit jobs and the industry, they deliver less revenue to your Treasury.
“With Trump’s tariffs hitting Scotch Whisky for the second time in just five years, it is within your gift to support the industry, honour your word to Scotch Whisky and cut the tax on Scotland’s world class product.
“I urge you to reverse the 10% whisky tax in the face of Trump’s 10% tariffs.
“Yours sincerely,
“Graham Leadbitter MP
“Moray West, Nairn and Strathspey
“Vice Chair of the APPG on Scotch Whisky”
