​Trump tariffs set to hit islands economy

Unlike in previous trade measures, which allowed for some flexibility between categories of products, the tariffs which took effect on Wednesday are across the board. Harris Tweed and farmed salmon are the two sectors most obviously affected.

There has been support from all sectors for the continuing efforts by the UK Government to secure a bespoke trade agreement with the United States. However, this is unlikely to come quickly and meanwhile, uncertainty will continue to cause damage.

The main concern for Harris Tweed lies in the fact that the vast majority of fabric ultimately destined for the US market goes via manufacturers in countries which face far higher tariffs than the UK. For example, Bangla Desh was set at 37 per cent and Cambodia at 49 per cent.

Margaret Ann Macleod, chief executive of Harris Tweed Hebrides, said: “There is very little manufacturing of end products in the United States, so the ten per cent tariff for the UK is misleading. The finished products are brought into the US from countries which face much higher tariffs.

“The US market is not nearly as important as it once was but it is still significant and we have many high end customers and long established relationships which we greatly value. We are in touch with our representatives in the US and will have to wait and see how it plays out”.

The chief executive of Salmon Scotland, Tavish Scott, told the Gazette on Wednesday: “The uncertainty that the US administration has caused is being assessed by salmon export businesses, including the ones which are present in the Western Isle.

“We very much hope the UK government will conclude an economic and trade deal for the sake of business certainty. I think the Prime Minister is taking the right approach. It is nerve-racking but we hope the UK Government’s diplomatic links will pay dividends if not in the coming weeks, then in the months ahead.

“There is no doubt that fish from Loch Roag, for example, ends up on dinner plates in New York and ultimately that is what is at stake.

“The feedback from our customers has been very positive but obviously they need to know what the price is going to be”.

One source of relief comes from the fact that Norway, the salmon industry’s main competitor in the US market, has been hit with a 15 per cent Trump tariff as opposed to the UK’s ten per cent. EU producers, including Faroes, faces a 20 per cent tariff. Chile, another major supplier, has a ten per cent rating.

Several drinks companies with exporting ambitions have developed in the islands in recent years, making the impact on that sector another source of concern. In particular the Isle of Harris Distillery has made a big marketing push in the US for both its whisky and gin, with outlets established coast-to-coast.

The Scotch Whisky Association also welcomed the cautious approach taken by the UK government: “We welcome the intensive efforts to reach a deal and we continue to support this measured and pragmatic approach.”