
Vanessa Feltz 3pm - 6pm
14 March 2025, 23:31
Bad news for St Patrick's Day lovers as Donald Trump’s tariff war could send the cost of a pint of Guinness soaring, a financial expert has warned.
Trump’s stand-off with Mexico and Canada - now followed by tariffs on Britain and the EU - is having an unfortunate knock-on effect that is set to hit drinkers in the pocket.
On Thursday, the US President threatened a 200% tariff on wine from the EU unless the bloc removes import tax on US whisky.
Now, with St Patrick’s Day round the corner, that is bad news for lovers of a pint of the black stuff - as the average cost of a pint of Guinness is tipped to go up 10% - even smashing through the £6 barrier in some parts of the country.
The average price of a pint of Guinness in the UK is £4.48, while in London it sits at £5.66, as of March 2024, an 8% increase from the previous year.
Alcohol company Diageo’s finance chief Nik Jhangiani said the company estimates operating profit could be dented by roughly $200 million if U.S. tariffs on Mexico and Canada are implemented in March.
John J. Hardy, Global Head of Macro Strategy at investment platform Saxo, 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.
He added that while the risk to the EU is more serious, we won’t see the impact of the tariffs until next month.
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Hardy continued: “A 10% increase is a reasonable baseline estimate for tariffs on European imports, but I still think that, excluding China, tariffs are chiefly used as a threat to prompt others to do or not to do certain policy moves.
“Just like us, Diageo has no idea where the Trump administration will end with these tariffs.
"The now-you-see-them, now-you-don’t tariffs against Canada and Mexico are likely mostly meant to encourage more companies to invest in the US, rather than that we see the US sustaining high tariffs against those two countries for a long period.
“The EU tariff risk is probably more serious, but we won’t know how the tariffs, “reciprocal” or otherwise, might shape up after the April 2 deadline and whether there is a material risk of a trade tiff.
“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.”