President-elect Donald Trump said he would issue an executive order to charge Mexico and Canada a 25% tariff on all products coming into the US when he takes office on 20 January.
In a post on his social media platform, Truth Social, Trump said: “Thousands of people are pouring through Mexico and Canada, bringing crime and drugs at levels never seen before.” As such, he said he would “sign all necessary documents to charge Mexico and Canada a 25% tariff on all products coming into the United States, and it’s ridiculous open borders”.
He continued: “This tariff will remain in effect until such time as drugs, in particular Fentanyl, and all illegal aliens stop this invasion of our country. Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem. We hereby demand that they use this power, and until such time that they do, it is time for them to pay a very big price.”
The US imported more than 321 million litres of Tequila from Mexico in 2023, making it the world’s largest importer of the agave spirit.
In addition, Tequila sales overtook those of American whiskey in the US spirits market in 2022, with sales of Tequila totalling US$6.5 billion and whiskey sales trailing behind at $5.3bn, according to the Distilled Spirits Council of the US (Discus).
Meanwhile, Tequila consumption grew from 19.7m nine-litre cases in 2019 to 30.6m nine-litre cases in 2023. According to Discus, Tequila has increased its US volumes by 294%, at an average rate of 7.1% per year since 2003.
A 25% tariff on all imports from Mexico would therefore have a direct effect on the Tequila and mezcal sectors, while it would be the Canadian whisky sector that would suffer predominantly if the US imposed tariffs on its neighbours to the north.
As a tariff is a domestic tax levied on goods as they enter the country, proportional to the value of the import, a bottle of Mexican- or Canadian-made spirit with a value of US$50 would face a US$12.50 charge with the implementation of a 25% tariff.
