Guinness-maker Diageo has warned that the US President's proposed US tariffs could deal a €193m blow to its profits, writes Henry Saker-Clark.

The drinks giant scrapped a key sales target because of growing uncertainty linked to the tariffs and volatile consumer demand.

Diageo, which also makes Gordon's Dry Gin and Baileys, said it is talking to the US government over Donald Trump's upcoming tariff policies, which could "impact" its sales recovery.

It comes after the price of Diageo's pints here - Guinness, Harp, Hophouse 13 and Smithwicks - rose by around 30 cent on Tuesday, after the fourth hike in two years took effect.

Over the weekend, the Trump administration confirmed plans to introduce 25% tariffs on imports from Canada and Mexico, although the start of these has been delayed for a month.

The firm said the taxes, which will really hit its tequila and Canadian whisky products, add "further complexity" to its ability to predict future trading.

Around 45% of the group's US sales are imports from Canada and Mexico. Finance chief Nik Jhangiani said yesterday it is expecting a $200m (€193m) impact if tariff policies remain the same.

He said the firm plans to mitigate around 40% of these, which could see the company increase its US inventory before tariffs kick in.

Debra Crew, chief executive of Diageo, said: "Our fiscal 2025 first-half results marked a return to growth, delivering organic net sales growth of 1% despite a challenging industry backdrop as consumers continue to navigate through inflationary pressures.

"The confirmation at the weekend of the implementation of tariffs in the US, whilst anticipated, could very well impact this building momentum.

"We are taking a number of actions to mitigate the impact and disruption to our business that tariffs may cause, and we will also continue to engage with the US administration."

(Pic: Artur Widak/NurPhoto via Getty Images)