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Mexican and Canadian spirits suffer 25% US tariff
US president Donald Trump has hit Mexican and Canadian goods with a 25% tariff, a move described as “significantly harmful” for the spirits industry.
On 1 February, trade bodies the Distilled Spirits Council of the US (Discus), the Chamber of the Tequila Industry and Spirits Canada released a joint statement addressing the Trump administration’s tariffs on spirits imports from Canada and Mexico.
It is the latest measure in an attempt to dissuade the US president from dragging the spirits industry into a trade war after he campaigned on stringent tariffs particularly with the country’s neighbours to the north and south, and China.
“We are deeply concerned that US tariffs on imported spirits from Canada and Mexico will significantly harm all three countries and lead to a cycle of retaliatory tariffs that negatively impacts our shared industry,” the statement reads.
“Maintaining fair and reciprocal duty-free access for all distilled spirits is crucial for supporting jobs and shared growth across North America. Our industries have thrived due to the level playing field established across our borders.”
During Trump’s previous administration, tariffs placed on steel and aluminium to the EU resulted in retaliatory tariffs on American whiskey which in turn led to tariffs on Scotch whisky and other exports.
Respective spirit categories struggled to grow as access to international markets became more expensive. In December 2023, the EU postponed its 25% tariff on American whiskey until March 2025, at which time it would be doubled were a new resolution not reached.
Now, after threatening a 25% tariff on Tequila in November 2024, Trump is following through with his hard-lined trade policies announcing tariffs on Canada and Mexico on Saturday (1 February).
“The imposition of a tariff not only negatively impacts trading partners but also harms domestic industries,” the statement reads. “We urge all parties to engage in constructive dialogue to address these concerns proactively and maintain our shared commitment to a thriving spirits industry across North America.”
Toasts Not Tariffs
One day prior, Toasts Not Tariffs, a coalition of 52 associations across all three tiers of the US beverage alcohol industry, announced that it had sent Trump a letter urging him against involving the wine and spirits industries in his ongoing tariff policies. What both statements get at is the geographic specificity of drinks such as Tequila, Scotch, and Cognac, and how production can not be moved.
“Our products support businesses across communities in every corner of the country – from the farmers who grow inputs such as grapes, corn, wheat, barley, hops, rye and rice on more than one million acres of farmland, all the way through the supply chain to the waiters, bartenders, truck drivers and retail clerks,” the letter read.
“Import tariffs on wine and spirits will erode access to our largest export markets, halt investments in the US, prevent US job growth and limit our industry’s ability to capture new markets.”
Whereas the impending tariffs with the EU center on American whiskey’s ability to grow in foreign markets, and Scotch whisky’s ability to do the same, the potential tariffs on goods from Canada and Mexico would place further stress on a spirits industry that is presently dealing with inflation, overstocking, and downshifts in consumer spending.
“This slowdown will be exacerbated if a cycle of tariffs and matching retaliation begins, and the impact will be felt not just by the distilled spirits industry, but also by consumers and the struggling hospitality sector, which is still recovering from the pandemic,” the joint statement read.
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