Think tariffs only involve cars and commodities such as oil and produce? Think again. Proposed 25% tariffs on imports could mean higher prices for Mexican tequila and mezcal and Canadian whisky.
The price of these goods could be impacted by Trump tariffs
Donald Trump has suggested he will put a 25% tariff on imported goods from Mexico and Canada. How will this affect the cost of goods?
If your go-to drink is tequila – or a margarita – or Modelo is your favorite beer, your bar tab may go up if President-elect Donald Trump’s plan goes into effect, imposing a 25% tariff on all imports coming from Mexico.
Similarly, if you prefer to pour Canadian whisky, you could find higher price tags on spirits from Canada, too, under Trump’s proposals.
Trump said the tariffs would help put pressure on illegal immigration and drugs coming into the U.S., he wrote Monday in a post on his social media platform Truth Social.
Whether or not these tariffs ever go into place – the pronouncements by Trump could be bargaining chips for future trade talks – makers of beer and spirits are anxious by the specter of potential tariff troubles.
All beverage alcohol products imported from Mexico and Canada would potentially carry higher retail prices for consumers if the tariffs were in place, said Bump Williams, whose firm Bump Williams Consulting of Shelton, Connecticut, services the alcoholic beverage industry. That includes all Mexican beer and tequila and products brewed and imported from Canada.
That’s because any tariff that has to be paid is typically passed onto the consumer in the form of higher prices.
At the same time, when the U.S. puts tariffs on incoming products, other countries will likely do the same on U.S. exports into their countries. “There are few, if any exceptions to this,” Williams told USA TODAY in an email exchange. “It will negatively impact all of our exports to these countries as well, mostly impacting Bourbon and Whiskey the most, and also Vodka.”
A tariff tit-for-tat could could lead to inflation and job losses in both countries, Mexican President Claudia Sheinbaum said on Tuesday, reading from a letter she said would be sent to Trump. “One tariff will follow another in response and so on, until we put our common businesses at risk,” she said.
But the tariffs, if imposed, could also affect consumers and U.S. industry. Here’s how.
How much could tariffs drive up the price of imported beer and spirits?
If you like to imbibe, you could pay more. That’s because many Americans have developed a taste for Mexican tequila and mezcal, with imports of $4.66 billion in 2023, up 160% since 2019, according to the Distilled Spirits Council of the U.S.
A 750-milliliter bottle of tequila, usually priced at $25-$50, could increase to $31.25-62.50, if fully saddled with the affect of a 25% tariff. A 750ml bottle of Canadian whisky could increase from $40 to $50.
Similarly, the cost of a six-pack of Modelo Especial Lager, the current top selling beer in the U.S., could rise from about $11 to $13.75.
Investors saw the potential challenges for Constellation Brands, which sells Modelo, Corona and Pacifico and Casa Noble Tequila, and Diageo, which owns Casamigos and Don Julio tequilas. Shares of Constellation were down 3% on Tuesday, while Diageo shares fell 1.4%.
Tariffs could also raise the prices of other imported products, including avocados from Mexico and oil and wood from Canada.
Despite the market’s maneuvers, most don’t think Trump will do this on day one. Instead, it’s likely “this is President Trump’s ‘opening salvo’ to drive U.S. businesses and to reduce the export taxes we currently incur. I think he is a very shrewd and cagey businessperson and an artist when it comes to negotiations,” Williams said.
This could also be a prelude to the renegotiation of the U.S.-Mexico-Canada Agreement, or USMCA, a free trade deal Trump negotiated and signed during his first term, Peter Tabor, an attorney and senior policy advisor at Holland & Knight and a former USDA trade official, told Reuters.
Tariffs would violate the USMCA, which which is up for renegotiation in 2026. And implementation of steep tariffs could make the U.S. become an unreliable trading partner, driving importers to other markets, he said.
What are the repercussions of tariffs on tequila, Mexican beer and Canadian whisky?
Tariffs can have a chain reaction throughout the economy, Chris Swonger, president & CEO of the Distilled Spirits Council, told USA TODAY. A tariff battle over spirits can affect farmers, who grow the grains used in making spirits, all the way to “bartenders, restaurant owners, tavern owners, package stores, and ultimately, the American economy,” he said.
During Trump’s previous term, the U.S. enacted tariffs on steel and aluminum. In retaliation, the European Union imposed a 25% tariff on American whiskeys – that led to a 20% decline in U.S. whiskey exports to the EU from $552 million in 2018 to $440 million in 2021, according to council data.
When the tariff was suspended during the Biden administration in October 2022, American whiskey exports increased by 29% in 2022, compared to the previous year.
But under the deal, the EU could impose a 50% tariff 25% tariff at the end of March 2025 is a new agreement isn’t reached.
Border security and drugs are real, important issues, Swonger said. “So we’re going to do our part, working with our counterparts and all the countries affected to … find common ground with the incoming Trump administration and make sure that we have a thriving American economy and a thriving American hospitality sector,” he said.
Contributing: Reuters.
Follow Mike Snider on X and Threads: @mikesnider & mikegsnider.
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