Scotland needs to prepare for the consequences of a Trump presidency, writes JOHN CUMMING
Some Scottish pundits have joked that the US presidential race is now a Lewis-Harris rivalry, in reference to former president Trump’s Hebridean roots. However, the implications of this race could strike closer to home in other ways, with tangible consequences for Scotland and its economy.
Despite social media fanfare around Kamala Harris’ installation as the Democratic Party’s presumptive nominee, former president Trump remains the favourite to win the US presidency in November. During his last term in office, Scotch whisky was hit with a 25% tariff, which cost the industry an estimated £600m in exports to the US.
Trump tariffs could now be set for a return. In a recent interview, the former president set out his approach to trade with Europe. He said, “We love Scotland and Germany. We love all these places. But once you get past that, they treat us violently.” He went on to say that, if elected in November, he will impose a 10% levy on all imports. Despite the former president’s apparent affection for Scotland, additional iconic Scottish products such as salmon, gin and textiles could suffer.
Trade uncertainty driven by a second Trump term may go beyond the products Scotland sends west, and extend to trade with the east too.
China is currently engaged in active aggression against Taiwan. For decades, governments in Beijing and Taipei have respected an unofficial dividing line in the Taiwan strait. China is now routinely crossing this line by air and sea, to underline its claim of control over the island nation.
In March this year, satellite imagery revealed a mock version of Taiwan’s presidential district constructed in Inner Mongolia, where the Chinese military appeared to be training for an invasion.
The Taiwan Relations Act sets out the US relationship with Taiwan, and its commitment to help defend it from attack. However, in recent days, Trump suggested that Taiwan should pay for US protection, and refused to say if he would defend the country from invasion. An isolationist Trump administration may put China in a stronger position to end Taiwanese autonomy by force.
But, beyond the obvious and significant concerns about sovereignty and the international order, why could this have such an outsize impact on the Scottish export economy?
Both China and Taiwan are important trading markets for Scotland, and the whisky industry in particular. In 2023, £235m worth of Scotch whisky was exported to China. Exports to Taiwan were even more lucrative, with the country importing £341m worth of Scotch whisky last year.
With China-Taiwan relations at boiling point, and the US’ role on the global stage uncertain, in cold economic terms Scotland’s distilleries are faced with the possibility of their fifth biggest customer invading their fourth biggest customer, putting over half a billion pounds worth of trade at risk.
The second half of this decade is set to be characterised by more uncertainty, and Scotland is not immune to this. The consequences of a US retreat from the world, and any subsequent conflict in the Indo-Pacific, would quickly reach places like Islay, Jura, Speyside and other parts of the Highlands and Islands.
Of course, potential economic challenges facing Scotland’s exporters are not of the same order as the deeply alarming situation facing the people of Taiwan, but businesses must not downplay the challenges coming over the horizon.
In a deeply interconnected world, they have an important role to play in advocating for tariff-free trade, underlining the value of exports, and nurturing links with nations like Taiwan, while political leaders take tough decisions about our collective security and freedom.
John Cumming is a client manager at Charlotte Street Partners
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