PULSE POINTS:
❓What Happened: Diageo, owner of Guinness and Johnnie Walker, is reducing the projected annual loss it attributed to President Donald J. Trump’s tariff policies by $50 million.
👥 Who’s Involved: Diageo, U.S. President Donald J. Trump, Diageo CEO Debra Crew, and equity analyst Aarin Chiekrie.
📍 Where & When: Tariffs announced April 2, 2025; Diageo issued its update on Monday.
💬 Key Quote: “Looking ahead, we will continue to work on measures to mitigate this impact further,” Diageo stated, expressing confidence in navigating international tariffs.
⚠️ Impact: The company forecasts reduced profits but plans to mitigate losses and save $500 million by 2028.
IN FULL:
The British beverage giant Diageo, owner of Guinness and Johnnie Walker, has flagged a $150 million annual hit to its profits, claiming this will be due to U.S. tariffs introduced under President Donald J. Trump. However, the company’s newest estimate, released on Monday, is a significant decrease from the expected $200 million loss it projected earlier this year.
It is unclear whether Diageo’s estimate includes provisions laid out in the new landmark bilateral trade agreement signed earlier this month between the United States and the United Kingdom, or if the loss is based mainly on the revenue impact of the 10 percent global tariff imposed by President Trump on April 2, 2025. Notably, President Trump paused higher, country-specific reciprocal tariffs for 90 days in mid-April. However, the recent U.S.-UK trade deal would preclude additional trade duties from being imposed on British exports once the pause expires.
Diageo’s recent shareholder update noted that its tequila and Canadian whiskey brands remain exempt from these levies, and tariffs on U.S.-China trade have had minimal impact on its operations. The company stated that it expects to mitigate about half of the tariff-related losses and expressed confidence in its ability to manage the challenges posed by international trade policies.
“Looking ahead, we will continue to work on measures to mitigate this impact further,” the company said, adding that its long history of navigating tariffs provided reassurance. The expected financial impact is already factored into Diageo’s fiscal guidance for 2025 and 2026. Importantly, the British company says it believes it can achieve around $500 million in savings by 2028, suggesting the long-term impact of the Trump administration tariffs will leave its business and market relatively unaffected.
CEO Debra Crew emphasized the company’s resilience: “We continue to believe in the attractive long-term fundamentals of our industry and in our ability to outperform the market. We view the near-term industry pressure as largely macroeconomic driven, with continued uncertainty impacting both the timing and pace of recovery.”
Diageo also reported a 2.9 percent rise in net sales for the first quarter of the year, reaching $4.4 billion.
