Donald Trump’s second term in power could be “devastating” to the Scottish economy if the incoming president slaps tariffs on imports to the US, experts have warned.
The American tycoon will be officially sworn in at his Washington inauguration today following his landmark election win in November last year.
Trump’s return to power has led to fevered speculation his new administration will soon impose a 20 per cent tariff on foreign goods imported to the US.
During his first stint in charge, the New Yorker imposed retaliatory tariffs on imports of Scotch whisky between October 2019 and March 2021 – costing £600 million in exports, according to the Scotch Whisky Association (SWA).
The tariffs were suspended for five years but are due to resume in 2026 – unless Trump intervenes.
The International Monetary Fund (IMF) last week warned US economic policies under Trump could hit the rest of the world and ultimately backfire on the US.
The UN agency said a threatened wave of tariffs could make trade tensions worse, lower investment, hit market pricing, distort trade flows and disrupt supply chains.
Dr Fabian Hilfrich, an expert on US foreign relations, told the Record that Scots could expect a return to the often “vindictive” style of politics Trump adopted during his first term.
The Edinburgh University academic said: “Foreign policy, and that includes Scotland, will not be about compromise. It will be about, ‘what’s in it for Donald Trump?’
“What matters to Scotland, a country deeply involved in exporting goods, is what may be subject to tariffs. The impact on whisky could be very bad.
“There are certain brands that are bottled solely for export. The US has traditionally been one of the primary markets for whisky. It could be devastating for the Scottish economy.”
Hilfrich predicted countries looking to negotiate opt-outs from American tariffs could expect difficult negotiations with the new Trump administration.
He said while Trump had a “soft spot” for Scotland, it was unlikely this would get in the way of his economic plans.
“When he talks about tariffs, Trump reimagines an America that is long gone. He has previously mentioned a country with low federal income taxes, but high tariffs,” the academic continued.
“What tariffs will lead to are huge inflationary pressures all over the world. But the priority of driving down inflation was one of the things that returned him to power.
“Everything will ultimately be down to negotiations. But Trump will demand certain things.
“On balance, there is a threat to the whisky industry. Trump doesn’t drink alcohol. I don’t think he would have much patience with an argument about it being a special case.”
The new US president has strong business and family ties to Scotland and is expected to make a visit to the country later this year.
Trump’s mother Mary was born and raised on the Isle of Lewis before later emigrating to New York.
Torcuil Crichton is the Scottish Labour MP for Na h-Eileanan an Iar, the Western Isles constituency which includes Lewis.
The former Daily Record reporter sent a Christmas card to Trump last year inviting him to return to his mother’s ancestral home.
The MP said: “Donald Trump is going to be the biggest political rainmaker of the next four years. Like the weather in the Hebrides – whether it’s fair or foul – you just have to go with it.
“He occupies the most powerful political office in the world, so we have to have that relationship. We have to deal with him, and hopefully in a way that benefits the country.
“He obviously has an interest in Scotland. I think he views it as the one place. I don’t think he’s that tied to his mother’s Hebridean home.
“But he does see Scotland as a place he is sentimentally attached to, as well as in a business sense.”
A spokesman for the SWA said: “When President Trump takes office the industry looks forward to working in partnership to build trade links which create jobs and investment in the US.
“We fully support the early engagement by the UK Government with the incoming US Administration, highlighting the investment the Scotch Whisky industry already brings to the US economy and the value it adds to the US hospitality sector.”
A Scottish Government spokesman said: “We greatly appreciate the strong and lasting social, cultural and economic ties Scotland has with the United States.
“The Scottish Government will work to ensure these ties continue to flourish, according to the values shared by both of our countries.
“The USA is one of Scotland’s most important markets and source of inward investment. We hope the US will always be a close trading partner, supporting a positive trading environment for businesses in Scotland and the US.”
Mathair a’ Chinn Suidhe – Trump’s Mother will be broadcast on BBC Alba at 9pm on January 20
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