Sobering stuff: UK alcohol industry reels from impact of Trump tariffs
To some extent, the US owes its very existence to the Welsh.
Up to 18 of the 56 signatories of the 1776 Declaration of Independence claimed Welsh heritage, depending on which source you believe, including one delegate who was born in Llandaff.
That is why Donald Trump's 'Liberation Day', when he imposed 'reciprocal' tariffs on nearly every country in the world, was such a sobering moment for the Welsh whisky maker Penderyn Distillery.
In 2014, during a Nato summit in the UK, the distillery presented Barack Obama with a bottle of Penderyn Independence, celebrating America's escape from colonial rule.
Now that particular special relationship is hanging by a thread.
'At the end of the day, it's the consumer who loses out,' said the Penderyn chief executive, Stephen Davies. In a good year, up to 10% of the company's £23m annual sales come from the US.
'It'll make the US more like Canada, which is hard to get into. Canadians go to the US and find imported whisky that they can't get. It'll be less choice for Americans and that's a bit sad.'
Welsh whisky accounts for a tiny fraction of the UK's alcohol trade, a wee dram compared with the big barrels of their cousins in the scotch business.
Exports of British beverages, spirits and vinegar to the US are worth £1.6bn a year, by far the most valuable segment of the agrifood category, according to the National Farmers' Union. Scotch makes up £913m of the total, about two-thirds.
Of total UK food and drink exports, scotch accounts for about a quarter, and about 2% of all UK exported goods.
The powerhouse distilleries in Scotland know, from bitter experience, how US tariffs can leave a bad taste in the mouth.
Between October and March 2021, the US imposed a 25% tariff on single malts and whisky liqueurs from the UK, collateral damage in a lengthy tit-for-tat dispute over competition between the aerospace companies Boeing and Airbus.
The result was a 25% fall in scotch exports to the US during the last three months of 2019. More than £600m of exports were lost in total, about £1m a day, over the 18-month period.
Trump's new tariff policy, announced during a characteristically erratic speech in the Rose Garden of the White House, introduced a tariff that is lower than before, at 10%, but whose length is undetermined.
One source in the spirits trade said scotch makers had agreed to rein in their anger, conscious of the fact that the president is unpredictable and could still be sweet-talked by British negotiators into rolling back or delaying the tariffs.
But the Scotch Whisky Association (SWA), which says the industry supports 66,000 UK jobs, did not hold back altogether. 'The industry is disappointed that scotch whisky could be impacted by these tariffs,' said a spokesperson.
'We welcome the intensive efforts by the UK government to reach a deal with the US administration, and we continue to support this measured and pragmatic approach towards a mutually beneficial resolution.'
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Davies said the pain would be shared between consumers and businesses on both sides of the Atlantic, partly due to the chaotic palimpsest of liquor laws that vary from state to state, the legacy of 1920s prohibition.
'You have a three-tier system of importer, distributor and retailer, so everyone wants a margin.
'A tariff of 10% would mean about $5 on a bottle of Penderyn Legend. There aren't many ways for us to absorb it, so some of the impact we'd have to share with the import company and some would work its way into the price.
'Imported whisky is already at a premium to bourbon and the market is very price sensitive. I don't think we'd pull out of the US but we'll have to make a decision on priorities.'
Whisky may be most of the ballgame when it comes to UK booze exports to the US, but it will not be the only corner of the alcohol industry to be affected.
As a proportion of total UK exports, the US market accounted for 21% of beer made from malt, 18.6% of the wider spirits category (including gin), and 14.7% of wine, according to figures from the NFU.
Some of these categories are admittedly small: Californians do not buy a lot of English wine and the US had its own thriving and varied craft beer scene before the UK did.
Some British brewers, such as Samuel Smith's and a string of newer independents, do have loyal customers in the US, who now face coughing up or trading down.
'While only 17% of independent brewers still export from the UK to anywhere in the world, the imposition of trade tariffs is bound to hit those brewers who sell to the US at a time of great domestic challenge for them,' said Andy Slee, the chief executive of the indie beer trade body SIBA.
'This is not good for independent British brewers.'
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