Trump tariff war set to send cost of Guinness soaring
Donald Trump’s trade war is set to send the price of Guinness soaring to new highs, a financial expert has warned.
Trump’s stand-off with Mexico and Canada, now followed by tariffs on Britain and the EU, is having a knock-on effect that might hit drinkers in the pocket.
The price of a pint of Guinness in the UK is set to rise by an average of 10 per cent, global head of macro strategy at Saxo John Hardy warned, meaning the stout will cost well over £6 in some parts of the country and over £7 in Canada.
“A 10 per cent increase is a reasonable baseline estimate for tariffs on European imports… [but] just like us, Diageo has no idea where the Trump administration will end with these tariffs,” Hardy said.
Potential price hikes follow a shortage of Guinness in Canada last December, which saw many pubs run out of Guinness entirely after football fans and social media influencers pushed sales up.
Diageo’s finance chief Nik Jhangiani has said that the company estimates operating profit could be dented by roughly £150m if US tariffs on Mexico and Canada are implemented.
Trump has already imposed 25 per cent tariffs on all steel and aluminium imports into the US, but the full scale of levies on European goods is still uncertain.
Hardy said Diageo’s warning is the company’s effort to create an insurance policy while they wait to assess the damage caused by Trump’s tariffs.
“Diageo’s move to warn of a potential loss on tariff impacts is like the prudent purchase of an insurance policy as they try to assess the potential downside risks to their future results in a ‘base case’ scenario of tariffs being implemented.
“This allows them to justify the risk of weak performance beforehand and to claim some positive news upside should the tariff impact prove far smaller,” he added.