The possibility of a 25% tariff on imports into the US from Mexico and Canada “could drastically reshape the US beverage alcohol industry”, according to the Wine & Spirit Wholesalers of America.
The inauguration of President Donald Trump on Monday (20 January) prompted WSWA to re-release research this week from economic research firm John Dunham & Associates (JDA). Trump proposed the implementation of tariffs on the two neighbouring countries during his pre-election campaign, and has since indicated 1 February as a potential start date.
In the meantime, the President has instructed federal officials to review US trade relationships for any unfair practices.
The JDA paper cited by the trade association, which can be viewed here, estimates that the tariff on Mexico alone could impact up to 14,000 US jobs, accounting for US$774m in wages, $1.3m in lost tax revenue and $2.5bn in reduced US economic output.
Imported products “account for 30%-to-35% of our industry’s market,” the WSWA added. “Single-origin products like tequila can’t be replaced in flavour, tradition or consumer demand by domestic products because there is no equivalency”.
WSWA chair Dina Opici noted a difference in the trading environment for alcohol in the US today compared to Trump’s first presidency, when tariffs were imposed on imports from the European Union. “Any new tariffs on wine and spirits in today’s economic climate would be extremely disruptive… ,” Opici said. “The entire industry – from suppliers to importers to distributors to retailers – is under immense pressure, with little room to absorb or distribute the cost of additional tariffs.
“Passing these costs onto consumers would only exacerbate the already fragile state of the wine market, leading to further deterioration.”
The organisation’s CEO, Francis Creighton, added: “Due to the uniqueness of the US alcohol three-tier system … these tariffs will primarily impact American businesses and consumers.”
Tequila has been in stellar growth in the US over the last decade. According to trade association the Distilled Spirits Council of the United States (Discus), the spirits’ ten-year CAGR for exports to the US by value from 2013 to 2023 stood at 20%, despite a year-on-year decline of just over 6% in 2023.
