President Trump made good on his promise today by imposing a 25% tariff on all goods from Mexico and Canada, with the exception of energy imports from Canada, which will face a 10% tariff. The drinks industry had hoped for an exemption from these new tariffs, but unfortunately, their pleas were rejected. Additionally, Trump has indicated his intention to impose tariffs on the European Union in the future, which could have significant implications for imported spirits and wine.

In response to the formal tariff announcement, DISCUS, the Tequila Chamber, and Spirits Canada released a joint statement expressing deep concern over the potential negative impact of U.S. tariffs on imported spirits from Canada and Mexico. They fear that these tariffs could harm all three countries and lead to a cycle of retaliatory tariffs that would adversely affect the industry as a whole.

Some of the biggest brands in the U.S. spirits industry are imported from Mexico and Canada. Brands such as Crown Royal Canadian whisky, Tequilas Don Julio, Patrón, Casamigos, and Jose Cuervo are among the top 11 spirits labels in terms of retail value in the U.S. Additionally, Tequilas are the top U.S. brands in terms of retail value for companies like Campari, William Grant, and Mast-Jägermeister.

The drinks trade coalition, Toasts Not Tariffs, which represents all three tiers of the industry, had previously urged the president to exempt wine and spirits from the tariffs. They highlighted the unique nature of the U.S. wine and spirits sectors, the heavy reliance of U.S. businesses on the sale of these products, and the potential negative impact of tariffs on the industry.

According to Toasts Not Tariffs, a 10% tariff on imported wine and distilled spirits could result in over 38,000 job losses across production, distribution, hospitality, and retail sectors, as well as nearly $3.3 billion in lost sales. A 20% tariff could lead to 74,000 job losses and almost $6.2 billion in lost sales. The trade group is also concerned about retaliatory tariffs from countries targeted by the administration, such as Canada and the European Union.

In response to the potential tariffs, the three largest provinces in Canada have threatened to bar U.S.-made wine and spirits in retaliation. The E.U. has also indicated that it may reimpose a 50% tariff on American Whiskeys in the future if certain conditions are not met.

It is clear that the imposition of tariffs on imported spirits and wine could have far-reaching consequences for the industry, potentially leading to job losses, lost sales, and retaliatory measures from other countries. The drinks industry is urging the administration to reconsider these tariffs in order to protect American businesses and workers.

In conclusion, the impact of these tariffs on the drinks industry cannot be underestimated. It is essential for all stakeholders to work together to find a solution that avoids the negative consequences outlined above. The future of the industry and the livelihoods of many Americans depend on it.