Donald Trump in Scotland: The £200bn reason why John Swinney must not make a mess of visit

The policy area on which Mr Swinney might have some possibility of influence is around trade and tariffs. So far, Keir Starmer has done pretty well on that front so, at this point, the obligation is to consolidate that advantage, not to threaten it.

There should be the closest possible co-operation between Downing Street and Edinburgh to ensure that Mr Swinney is singing from exactly the same hymn sheet as the Prime Minister, including appreciation of the trade deal to which Mr Trump has apparently signed up.

It is advisable to include the word “apparently” in every such statement since it is well established that when dealing with Mr Trump, the Lord giveth and the Lord taketh away, particularly if provoked. A lot of livelihoods are dependent on not screwing it up.

It also helps to understand and, to some extent, empathise with where Mr Trump is coming from on the whole question of tariffs and protectionism, which runs deep in the American psyche. It was only in 1947 that the USA converted to the principles of free trade, and even then a lot of its people and communities were never really convinced. We should be able to understand that.

READ MORE: Why Donald Trump's mother's birthplace has a lesson for Scotland in dealing with US President

‘Liberation Day’ stock market plunge

It is received wisdom and probably true that nobody ever wins from trade wars. However, that seems a bit glib in the vast swathes of America which have seen the disappearance of proud manufacturing industry. Mr Trump has not found it difficult to convince his base that the old medicine of tariffs is required to save what’s left, or even turn the lights back on in derelict factories and mills.

He soon found out after being re-elected that rhetoric on this subject is easier than implementation. His great “Liberation Day” tariffs announcement led to stock markets plummeting and they were hastily put on hold. Since then, there has been more bluster than clarity but as things stand, the UK will “benefit” from a ten per cent tariff, significantly lower than the EU.

Our exporting industries can live with that. The Scotch Whisky Association has welcomed the UK Government’s “measured and pragmatic approach”. So let’s just keep the ship steady until the storm passes.

READ MORE: Whisky leaders urge Starmer to 'seize the moment' in Trump meeting to ditch tariffs

Cashmere tariff panic

My own learning curve about the direct relevance of tariffs to that most basic human commodity – jobs – came shortly after I became UK trade minister and received a call at home one Saturday morning from the panic-stricken managing director of a Borders cashmere company which exported 90 per cent of its production to the United States.

Did I know what was going on with the World Trade Organisation authorising US tariffs on cashmere knitwear as part of a long-running dispute about the EU giving preferential treatment to Caribbean bananas, as opposed to those imported from American-owned companies in Latin America? If this went ahead, many hundreds of jobs were at stake. It was the kind of call one does not forget.

READ MORE: Scotland's economic growth 'weaker' than rest of UK as business 'falters' from Donald Trump tariffs

To the uninitiated, it would require a book to explain how cashmere knitwear had become intertwined with bananas in a trade war, but take my word for it. We did pretty well on that one, by underwriting the impact of tariffs until that particular storm had passed, which it duly did. But it taught me two lessons – first, the ruthlessness with which the US acts on trade issues and, second, the direct and immediate impact this has on jobs. That’s why it is so important to proceed with care, particularly in the current, capricious environment.

Harris Tweed also has a colourful history of avoiding punitive US tariffs which once involved a Free Church minister going to Washington to plead the industry’s special case, having first rallied support for exemption among fellow fundamentalists in the textile-producing areas of the southern States. At that time, vast quantities of the fabric were exported to the US to be turned into jackets.

The change that has taken place epitomises the issue. To all intents and purposes, there is no American garment-making industry any more. Much of the fabric goes to other countries with lower labour costs and it is the finished products which enter America and will be subject to tariffs at whatever rate is eventually set. Fortunately, the American market is much less dominant than it used to be, for there would now be no space for even a Free Church minister, never mind a trade one, to exercise benign influence!

Value of exports to US is huge

For similar reasons, Ireland is waiting with trepidation for the terms of the US-EU deal. By relying so heavily on American tech companies for low-taxed inward investment, the threat of tariffs on the finished products which are exported back to the US is a serious threat to its economic base. Trump’s message to Apple and the likes that they should be manufacturing in America is intended to be powerful.

Last time round, Trump’s tariffs cost the Scotch Whisky industry around £600 million. Understandably, along with Scottish salmon, it tends to catch the headlines while representing a modest proportion of the overall picture. The United States market is worth almost £200 billion to the UK in goods and services, by far our biggest trading partner. The difference between ten per cent and even 15 per cent matters a lot, which is why Mr Starmer’s trade deal is so important.

Storms do pass and so do presidents but they have to be weathered in the meantime. A single-minded focus on that objective from Scotland’s First Minister is the least that can be expected, as well as his patriotic duty.