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Proposed 25% Tariff on Mexican and Canadian Imports Could Drive Up Prices on Tequila, Beer, and Spirits

by Kaia

If you’re a fan of tequila, margaritas, or Mexican beer like Modelo, or if Canadian whisky is your go-to spirit, your bar tab could soon increase. President-elect Donald Trump has proposed a 25% tariff on all imports from Mexico and Canada, a move that could impact the prices of popular alcoholic beverages.

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In a post on his social media platform, Truth Social, Trump explained that the tariffs were intended to put pressure on illegal immigration and drug trafficking, though it remains unclear whether these tariffs will be implemented or serve as leverage in future trade negotiations.

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Regardless of the final decision, the proposal has raised concerns among the alcohol industry. According to Bump Williams, founder of Bump Williams Consulting, which works with the alcoholic beverage sector, a tariff on imports from Mexico and Canada would likely lead to higher prices for consumers. This would affect a wide range of products, including all Mexican beer, tequila, and spirits brewed and imported from Canada.

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“The tariff cost is typically passed down to the consumer in the form of higher retail prices,” Williams explained.

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The impact could be felt beyond just higher prices on imports. When the U.S. imposes tariffs on foreign goods, it often triggers retaliatory measures from the affected countries. In this case, Williams predicts that Canada and Mexico may place tariffs on U.S. exports, particularly affecting products like Bourbon, whiskey, and vodka.

“If tariffs go both ways, it could negatively affect exports of U.S. beverages, leading to reduced sales and job losses in the industry,” Williams added.

Mexican President Claudia Sheinbaum has voiced concerns over a potential tariff escalation, suggesting it could harm businesses on both sides of the border. “One tariff will follow another, putting our common businesses at risk,” she said in a statement.

For consumers, the immediate concern is the potential for higher prices on their favorite alcoholic beverages. The U.S. has seen a surge in demand for Mexican spirits in recent years, with tequila and mezcal imports reaching $4.66 billion in 2023, up 160% from 2019, according to the Distilled Spirits Council of the U.S.

As the situation unfolds, both industries and consumers are left to wonder how much of an impact the proposed tariffs could have on the cost of their drinks – and whether the changes will come to pass at all.

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