The whisky sat in crates at a Glasgow warehouse longer than it should have. Not because there was no demand—American bars still wanted Scottish single malts. But the new tariff structure made the math impossible for smaller distributors. By autumn 2025, the bottles that did cross the Atlantic carried price tags that made even loyal customers hesitate.
This wasn’t an isolated problem. UK food and drink exports to the United States dropped 8.6% in the second half of last year, according to the Food and Drink Federation. The culprit was clear: President Donald Trump’s trade levies reshaped cost structures across an entire sector. What had been a promising year—exports rose nearly 19% in the first six months—turned sour as tariffs bit into margins and consumer wallets alike.
The numbers tell a story of whiplash. British exporters rode momentum through spring, then watched it evaporate as American buyers confronted higher shelf prices. The US remains the largest non-EU market for UK food products, making the downturn particularly painful. From premium infant formula to aged spirits, categories that had thrived suddenly faced structural disadvantages that no marketing campaign could overcome.
Karen Betts, chief executive of the FDF, framed the challenge bluntly. Rising production costs, tariff walls, and tightening household budgets created a perfect storm. Then conflict in the Middle East added energy spikes and shipping disruptions to an already strained system. Companies weren’t just competing on quality anymore—they were fighting arithmetic.
Infant formula became a case study in unintended consequences. Kendamil, a high-end British brand, found itself subject to what trade analysts call “stacked tariffs.” The result was a duty structure harsher than what EU competitors faced for identical products. American parents who had embraced the premium brand now paid significantly more, while European alternatives remained comparatively affordable. The policy didn’t distinguish between mass-market and specialty goods—it simply made British options more expensive.
Whisky, Britain’s flagship food export, experienced a subtler decline. Global shipments fell 0.8% in value and 4.3% in volume last year. These aren’t catastrophic numbers, but they represent a reversal for an industry that had posted steady growth. Distilleries in Scotland and Northern Ireland operate on long timelines—casks aging today won’t reach market for years. When demand signals turn negative, the ripple effects compound over time.
Yet the picture wasn’t uniformly grim. Milk and cheese products found buyers, helping total food and drink exports post modest gains for the year. Volumes rose 6% compared to 2024, though the FDF noted they remained below pre-Brexit levels. That comparison matters. Food exports to the EU in 2025 were nearly a third lower than in 2019, underscoring how regulatory and tariff changes have reshaped trade flows over half a decade.
The data reveal a sector caught between multiple pressures. Inflation hasn’t disappeared in key markets—consumers in the US and much of Europe are still cautious. Producers face elevated costs for energy, labor, and raw materials. Trade barriers, whether from Brexit adjustments or new US levies, add friction at every stage. Companies that once planned expansion now focus on survival.
India emerged as a bright spot. Exports there jumped 12% in 2025, and a new free-trade agreement promises gradual tariff reductions over the next decade. Products like breakfast cereals, chocolate, and soft drinks will see duties lowered in stages starting this summer. It’s a long-term play, but for an industry starved of good news, even incremental openings matter.
The broader question is strategic. British food and drink companies built their export models around access—first to European markets, then to global ones. When that access becomes expensive or complicated, volume drops or margins collapse. Some firms are relocating production closer to major markets. Others are rethinking product lines to focus on goods less sensitive to tariff changes. A few are simply exiting markets where the economics no longer work.
Washington’s tariff policy reflects a broader shift in US trade philosophy under Trump’s second term. Protectionist measures aimed at narrowing trade deficits have hit multiple sectors and countries. UK exporters aren’t alone—Canadian lumber, Mexican steel, and Chinese electronics all face similar headwinds. But for a mid-sized economy like Britain’s, each closed door narrows options significantly.
European competitors, meanwhile, have maintained better access to US markets in some categories due to existing agreements or tariff exclusions. That creates competitive imbalances UK firms struggle to navigate. A French cheesemaker or Italian pasta producer might face lower barriers for similar products, purely based on origin. In commodity-like categories where branding matters less, price differentials decide winners quickly.
The Middle East conflict Betts referenced isn’t an abstraction for this sector. Shipping routes through the Red Sea became more expensive and dangerous as regional tensions escalated. Energy costs spiked, hitting production facilities and transport networks alike. For products with thin margins—bulk grains, basic dairy—even small cost increases can eliminate profitability on long-haul exports.
Looking ahead, the industry faces a credibility test. If volumes remain below 2019 levels while new barriers keep rising, the export growth narrative that sustained investment and optimism collapses. Companies will prioritize domestic and near-market sales, reducing the UK’s footprint in global food trade. That’s not just an economic loss—it’s a strategic one, as cultural influence often travels with consumer goods.
Trade policy, in the end, isn’t abstract. It’s whisky sitting in warehouses, formula brands losing market share, and dairy exporters running new calculations. The second half of 2025 showed how quickly momentum can reverse when tariffs reshape the landscape. Whether the damage proves temporary or permanent depends on decisions made in Washington, Brussels, and London—decisions that, for now, remain uncertain.
