President-elect Donald Trump has already pledged to impose a 25% tariff on all products coming into the US from Mexico and Canada, as well as additional tariffs on China, from his first day in office.
The announcement was made via his account on Truth Social on November 26, with Trump citing the tariffs as a repercussion of drugs (in particular Fentanyl) and people coming into the US.
With the tariffs ‘on ALL products’ coming into the US from Canada and Mexico, according to Trump’s post, spirits imports can be expected to be affected.
Tequila tariffs
Tequila is booming in the US: with growth rates projected at a 7% CAGR over 2021-2026.
But tequila – by its very definition – must be made in Mexico (and specifically, one of five authorized tequila regions (Guanajuato, Jalisco, Michoacan, Nayarit and Tamaulipas). So tequila brands will instantly be affected.
That also applies to other related categories such as Mezcal: which must be produced in one of nine Mexican states.
If tariffs on tequila are passed onto consumers, a bottle of tequila at $30 could be expected to rise to around $37. And the strongest growth in the tequila category is expected to come from premium brands. That means a premium brand at $100 a bottle could turn into $125.
Canadian Whisky
Meanwhile, Canadian whisky is another category that’s been growing in the US. In 2023, 17.5 million 9-liter cases of Canadian whisky were sold in the US. That’s part of a growing trend towards super-premium products: with the category up 118% since 2003.
If a 25% tariff is passed onto consumers, a bottle of whisky at $40 would rise to $50.
Speaking on Tuesday (26) November, Chris Swonger, DISCUS President and CEO, highlighted that tariffs have been hampering the spirits industry for years – and the worry for the American spirits industry is retaliatory tariffs.
“We appreciate President-elect Trump’s goal to protect the American people and U.S. jobs,” he said. “Our industry has been weighed down by retaliatory tariffs as part of unrelated trade disputes since 2018, which crashed our exports harming thousands of distillers and their farmers across the United States.
“We are now currently facing the threat of a devastating 50% tariff on American whiskey by the EU at the end of March 2025. Imposing a tariff on Tequila and Canadian Whisky from two of our largest trading partners could kick off more retaliatory tariffs on American spirits to Canada and Mexico.
“Under the United States-Mexico-Canada Agreement (USMCA), Tequila and Canadian Whisky are designated as distinctive products, similar to Bourbon, where they can only be made in their country of origin. Slapping a tariff on Tequila and Canadian Whisky will not boost American jobs simply because they cannot be produced in the United States.
“The U.S. spirits sector continues to experience a slowdown. At the end of the day, tariffs on spirits products from our neighbors to the north and south are going to hurt U.S. consumers and lead to job losses across the U.S. hospitality industry just as these businesses continue their long recovery from the pandemic.
“As President-elect Trump comes into office, we urge all of governments to work together to reach an agreement that ensures tariffs are not imposed on spirits products.”
