A major producer of Scotch whisky has issued a sales warning as fears grow that a global trade war could erupt because of Donald Trump.
Diageo, which owns Johnnie Walker and other iconic Scottish drinks brands, has scrapped a key sales target amid growing uncertainty over US tariffs and volatile consumer demand.
The company, a major employer in Scotland, said it was in talks with the Trump Administration over upcoming tariff policies that could “impact” its sales recovery.
It said the confirmation over the weekend that tariffs will be imposed, although delayed for at least a month, “adds further complexity” to its ability to predict future trading.
Diageo said its tequila and Canadian whisky brands are expected to be particularly affected.
It came as the London-based company revealed that net sales dipped by 0.6 per cent to £8.8 billion for the six months to December 31.
John Swinney has previously vowed to use Donald Trump’s affinity for Scotland in a bid to avoid the prospect of tariffs being applied on imports to the US.
The SNP leader said he had expressed the importance of trade between the countries, especially Scotch whisky, during a call he held with the US president-elect last month.
It comes as Trump suspended for 30 days the hefty tariffs on Mexico and Canada that he threatened after last-minute negotiations with the two US neighbours.
Trump has promised sweeping tariffs on goods from Mexico Canada and China,
But it remains unclear whether Trump will follow through on his threats to Canada and Mexico once the 30-day deadline is up.
The uncertainty stirs fears that could see businesses reducing their reliance on American markets, holding off on investing in building new factories or hiring workers until the trade stand-off becomes more clear.
To sign up to the Daily Record Politics newsletter, click here