Mexican Tequila Manufacturers Fear Import Tariffs
Under the impending threat of a 25% import tax by the United States, Mexican tequila producers express concern over the potential disruption to their established businesses.
Melly Barajas, owner of Azteca Wines And Spirits, a women-led distillery in Jalisco, emphasizes the industry's meticulous planning for seasonal hiring and bulk ingredient sourcing. The proposed tariffs have frozen their supply chain, leaving them in a state of uncertainty.
"We are at a standstill, hoping they reconsider and refrain from implementing these measures," said Barajas, speaking from her office adorned with U.S., Canadian, and Mexican flags.
U.S. President Donald Trump's proposed 25% blanket tariff on Mexico and Canada is based on alleged inaction to curb immigration and fentanyl trafficking. However, a 30-day pause was agreed upon on February 3rd, after both countries pledged to strengthen border security.
Tequila, produced from the agave plant and featured in popular cocktails like margaritas, has experienced a surge in popularity. In 2023, it overtook whiskey as the second best-selling spirit in the United States, behind only vodka.
The U.S. imported approximately $3.8 billion of tequila in the first nine months of 2024, marking a 13% increase from the same period in 2023. This amount surpasses combined imports of whiskey, gin, rum, brandy, and vodka.
Similar to French champagne and Italian parmesan cheese, products labeled as tequila or mezcal must be produced in Mexico. Hence, tariffs would directly translate into higher prices for U.S. consumers.
Industry associations for North American spirits warn of potential job losses and harm to the hospitality sector, still reeling from the impact of the COVID-19 pandemic. Barajas predicts a shift towards alternative beverages in the event of tariffs, despite growing interest in tequila in countries like Germany, Spain, and Russia.
"The uncertainty created by these tariffs threatens the livelihoods of our team and the entire production system we've built over the years," lamented Barajas.