President Trump followed through today on his threat to levy 25% tariffs on all goods from Mexico and Canada, with one exception being energy imports from Canada, which will face a 10% tariff. The drinks industry had hoped to gain a carve-out from the new tariffs, but those pleas appear to have been denied. Trump also said he intends to impose tariffs on the European Union looking ahead, in another move with significant implications for imported spirits and wine.
“We are deeply concerned that U.S. 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,” said DISCUS, the Tequila Chamber, and Spirits Canada in a joint statement following the formal tariff announcement.
Some of the U.S. spirits industry’s biggest brands are imported from Mexico and Canada. Crown Royal Canadian whisky (Diageo) as well as Tequilas Don Julio (Diageo), Patrón (Bacardi), Casamigos (Diageo), and Jose Cuervo (Proximo) all rank within the top 11 spirits labels in retail value terms in the U.S., according to Impact Databank. Additionally, Campari (Espolòn), William Grant (Milagro), and Mast-Jägermeister (Teremana) all count Tequilas as their top U.S. brands by retail value.
Yesterday, the drinks trade coalition Toasts Not Tariffs—representing all three tiers of the drinks industry—had urged the president to exempt wine and spirits from being tariffed.
“Given the unique nature of the U.S. wine and spirits sectors, the heavy dependence of U.S. restaurants and other small businesses on the sale of these products, and the challenging U.S. marketplace, we respectfully request that wine and spirits be excluded from any new or universal tariffs,” the trade group said in a letter to the White House. “Importers, distributors, retailers—and especially restaurants—operate on razor-thin margins and rely on the profitability of alcohol sales for their survival. New tariffs on imported wine and spirits would harm, not help, American businesses, threatening the livelihood of tipped workers and small businesses across the country.”
“We estimate that a 10% tariff on imported wine and distilled spirits could result in over 38,000 American job losses across production, distribution, hospitality, and retail and nearly $3.3 billion in lost sales,” the letter added. “A 20% tariff could cost 74,000 U.S. jobs and nearly $6.2 billion in lost sales.”
Toasts Not Tariffs is also wary of retaliatory tariffs in countries targeted by the administration. The three largest provinces in Canada—a $1.1 billion retail market for U.S. wine—have threatened to bar U.S.-made wine and spirits in retaliation. And the trade group said it’s “particularly concerned that the E.U. will reimpose its tariff on American Whiskeys at 50% on April 1, 2025, if there is no agreement on steel and aluminum or the EU does not extend the suspension of its tariff.”—Daniel Marsteller
