US president Donald Trump said the proposed 25% tariffs on Canada and Mexico will go ahead on 4 March next week, which will impact spirits.
Before he took up his presidency, Trump promised to slap 25% import tariffs on all goods from Canada and Mexico. This would impact Tequila, mezcal and Canadian whisky, to name just a few regional spirits.
The tariffs were due to come into effect on 1 February, but following 11th-hour talks with both Canadian prime minister Justin Trudeau and Mexican president Claudia Sheinbaum, the move was postponed until 4 March.
The reason behind Trump’s tariffs are related to illegal migration and illicit drugs, notably fentanyl, which the US president claims are “pouring into” the States from both countries.
In a post on the Truth Social media platform yesterday (27 February), Trump wrote: “Drugs are still pouring into our country from Mexico and Canada at very high and unacceptable levels. A large percentage of these drugs, much of them in the form of fentanyl, are made in, and supplied by, China.
“More than 100,000 people died last year due to the distribution of these dangerous and highly addictive poisons. Millions of people have died over the last two decades. The families of the victims are devastated and, in many instances, virtually destroyed.
“We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed tariffs scheduled to go into effect on March fourth will, indeed, go into effect, as scheduled.
“China will likewise be charged an additional 10% tariff on that date. The April second reciprocal tariff date will remain in full force and effect. Thank you for your attention to this matter. God bless America!”
Proximo Spirits, which owns Jose Cuervo Tequila, has estimated an US$80 million cost to its business if the tariffs go ahead.
Will Mexico and Canada retaliate?
When the tariffs were due to be imposed earlier this month, on 2 February, Canadian prime minister Trudeau announced retaliatory tariffs worth CA$155 billion (US$106.6bn) on the US, which included American whiskey, to begin on 4 February.
In a press briefing yesterday (27 February), Trudeau said Canada was responsible for less than 1% of fentanyl entering the US.
He also warned: “If on Tuesday [4 March] there are unjustified tariffs brought in on Canada, we will have an immediate and extremely strong response.”
Tensions had been escalating between Canada and the US in anticipation of Trump’s planned tariffs. American spirits were being pulled from stores in Ontario, British Columbia and Nova Scotia following Trump’s announcement.
The week prior, Ontario premier Doug Ford threatened to “clear off every bit of US alcohol off the shelves” if Trump’s tariffs went ahead. The government-run Liquor Control Board of Ontario controls liquor stores across the province.
When Trump was last in power, he put tariffs on steel and aluminium from the EU, which resulted in retaliatory tariffs on American whiskey. This escalated further, leading to tariffs on Scotch whisky and other exports.
In December 2023, the EU postponed its 25% tariff on American whiskey until 31 March 2025. However, if a new agreement is not reached before then, the tariff will be doubled to 50%.
Read Full Story at source (may require registration)
Author: Melita Kiely
