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Trump’s tariffs set to shake tequila and mezcal markets
The potential extent of incoming President Donald Trump’s threatened tariff on imports from Mexico has come to light.
Data provided exclusively to Reuters by ImportYeti suggests that market leaders Diageo and Becle (the owner of Jose Cuervo) each send tequila and mezcal worth about US$1.5 billion to the US each year.
The calculations were based on Mexican customs data.
Trump has promised to put tariffs of 25% on Mexican goods in a political act to redress trade imbalances and encourage the Mexican government to act on illegal immigration to the US.
The expected effect would be for the importers to be forced to increase prices for tequila and mezcal, categories that have led the cocktail boom in the US.
Tariff fallout
U.S. industry imports totalled $4.6 billion in 2023, up 160% since 2019, according to the Distilled Spirits Council of the United States (DISCUS), which has warned the tariffs would cost jobs.
DISCUS separately said it planned to seek an exemption to Trump’s proposed universal tariffs of 10% on all foreign goods.
Diageo shipped more than 25 million litres of tequila from Mexico to the U.S. last year, including brands Don Julio, Casamigos, DeLeon and 21 Seeds, according to ImportYeti.
That equates to 33.7 million 750 millilitre bottles, Reuters calculated. The data references various editions of each brand, from the cheapest ‘blanco’ versions to far more expensive labels like Don Julio 1942, which sells for $139.99 per 750 ml bottle at large U.S. spirits retailer Total Wines & More, offering the most detailed insight yet into the value of imports exposed to the tariffs.
Last week Brown Forman said it was taking “pre-emptive action” to counter the effects of any reprisal duties placed on American spirits in Europe if Trump activates his plan.
Although so far unspecified, industry observers conclude that could only mean shipping extra supplies before tariffs go up.
The Drinks Business has asked the major drinks groups including Diageo and Pernod Ricard if they are exporting extra volumes to the US in advance of Trump moving into the White House on January 20.
All have declined to comment but Diageo told Reuters. “We will work with the incoming administration on issues that affect our business,” it said.
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