1. Why whisky is the canary in the coal mine
When BBC Radio Scotland asked me to discuss US tariffs and Scotch whisky, it was because whisky makes the story tangible. The US is the single largest market for Scotch by value, and recent tariff rounds have already pushed volumes down by around 15% over some periods, even as it has remained the top destination.
But the dynamics we see in whisky – sudden policy shifts, legal uncertainty and pricing pressure – are now a fact of life for all UK exporters to the United States.
The US is the UK’s largest single‑country export market overall, and a vital outlet for everything from financial services to cars, aerospace, food and drink and advanced manufacturing. When Washington rewrites the tariff rulebook, every UK board with US exposure needs to pay attention.
2. The Supreme Court ruling: IEEPA is off the tariff table
On 20 February 2026, the US Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not give the President a general power to impose tariffs. IEEPA remains a powerful tool for freezing assets and restricting transactions, but tariff‑setting belongs, constitutionally, to Congress.
This has three immediate consequences:
- The IEEPA‑based “emergency tariffs” introduced in recent years are unlawful and must be dismantled.
- Lower courts and the administration now face the complex task of working out how far back refunds should go and who is entitled to what share of the money.
- Future presidents cannot use IEEPA as a catch‑all shortcut for sweeping new tariffs.
For UK exporters, the key point is that one route to unilateral US tariff hikes has been closed – but others remain very much open.
3. Old powers, new surcharge: the 15% twist
Almost as soon as the Court spoke, the administration pivoted. Drawing on other trade statutes – including Section 122 of the Trade Act 1974 – the White House announced a temporary 15% surcharge on almost all imports, intended to run for up to 150 days while Congress considers its options.
In other words:
- The mechanism has changed (IEEPA tariffs out, surcharge under other laws in).
- The commercial challenge for UK exporters – higher landed costs, uncertainty over duration, and complicated negotiations with US buyers – continues.
For Scotch whisky producers, that means recalculating margins on every shipment and working with US importers to decide how far the surcharge can be absorbed, passed on, or offset against any refunds of past IEEPA‑linked duties. For UK manufacturers, it means repricing complex supply‑chain contracts and revisiting long‑term US sales agreements.
4. Where the UK–US Economic Prosperity Deal helps – and where it doesn’t
The 2025 UK–US Economic Prosperity Deal (EPD) was billed as a pragmatic way to deepen ties without a full free trade agreement. It has delivered some real wins – such as improved conditions for UK steel and aluminium exports via tariff‑rate quotas and eased access for certain US products into the UK.
Crucially:
- On the US side, the EPD was implemented using existing powers in the Trade Expansion Act 1962 (Section 232) and other trade laws, via Presidential proclamations and an Executive Order.
- On the UK side, commitments have been delivered through powers in the Taxation (Cross‑border Trade) Act 2018 and the Trade Act 2021, using statutory instruments rather than a new “US–UK Act”.
For exporters, that means:
- The EPD has created useful pockets of certainty (for example, around some metals and automotive products).
- But it is not a treaty‑level guarantee against broad measures like the new 15% surcharge, which sit on top of, or alongside, EPD preferences rather than being constrained by them.
The whisky example shows this clearly: even where underlying MFN or EPD‑linked rates are moderate, a new horizontal surcharge can materially change the price that US consumers see on the shelf.
5. Lessons from Scotch whisky – for every UK sector
Scotch whisky brings the issues into sharp focus:
- The United States is the largest single market for Scotch, with export values around the £1 billion mark in recent years.
- Earlier US tariff rounds already cut Scotch exports to the US by about 15% in volume over particular periods, as US buyers traded down or delayed orders.
- The industry has had to use a mix of price support, promotional spending and portfolio adjustment (for example, non‑age‑statement bottlings) to stay competitive.
These responses are not unique to whisky. Other sectors can draw three broad lessons:
- Tariff risk is now continuous, not episodic
Legal constraints on one statute (IEEPA) simply push the US administration towards other levers. UK exporters in sectors from automotive to agri‑food should assume tariff policy will remain a live, political tool. - Commercial agility matters as much as legal certainty
The firms that cope best are those that can quickly adjust pricing, product mix and contract structures when tariffs move. Relying on long, fixed‑price arrangements into the US without review clauses is increasingly risky. - Market concentration magnifies the impact
Where a single market (like the US) accounts for a large slice of global sales, even a modest tariff can have outsized effects on profitability and investment decisions.
6. Thinking beyond the US: Mercosur and other growth markets
None of this means “walk away from America”. The US is simply too large, wealthy and sophisticated a market for UK exporters to ignore.
But it does reinforce the case for careful diversification. Mercosur is a good example:
- The bloc brings together a population approaching 300 million and a combined GDP close to 3 trillion US dollars.
- Brazil has become an increasingly important destination for Scotch and other premium UK products, helped by steps such as Geographical Indication protection for Scotch whisky.
For most UK exporters, Mercosur will not substitute for the US in the short term. But it can, and should, form part of a strategy to balance concentrated US exposure with growth positions elsewhere in the Americas.
7. What UK exporters should do now
Across sectors, we are encouraging UK exporters to:
- Map their tariff exposure
- Identify which products (by HS code) face the new 15% surcharge and how that interacts with any sector‑specific rates.
- Understand where EPD preferences help – and where they do not.
- Re‑gear contracts and pricing
- Build in tariff and surcharge review clauses where possible.
- Clarify who bears tariff costs under your Incoterms and how quickly prices can be adjusted when policy shifts.
- Invest in relationships, not just transactions
- Work closely with US importers and distributors to share information on refunds, surcharges and promotional support.
- For sectors like whisky, salmon and speciality foods, maintain brand presence even during difficult tariff periods to avoid losing shelf space to competitors.
- Plan for diversification, not abandonment
- Use medium‑term planning to grow in markets such as Mercosur, the Gulf and parts of Asia, while still treating the US as a core profit engine.
8. Turning uncertainty into strategy
The Supreme Court’s IEEPA ruling is a reminder that law, politics and trade are tightly intertwined in Washington. For UK exporters, the message is not that the US has become impossibly risky – but that passive strategies are no longer enough.
Whisky’s experience – from BBC studio discussions to boardroom debates – shows how a single product line can become a barometer for much wider export risk. UK businesses that treat tariff policy as a permanent, manageable risk, rather than an occasional shock, will be best placed to protect margins and keep growing in the world’s most important markets.
If you’d like help translating these themes into a sector‑specific plan – whether you are in food and drink, manufacturing, or services – we can work through the implications for your export strategy in detail.
