Trump tariffs leave Mexican tequila producers with sour taste
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More than two-thirds of tequila produced in 2024 was exported to the United States.
PHOTO: REUTERS
GUADALAJARA, Mexico - Mexico’s booming tequila industry was left reeling on March 5 after US President Donald Trump slapped sweeping tariffs on the Central American nation that producers say threaten the popularity of its most famous liquor.
Mr Trump imposed 25 per cent levies on Mexico and Canada, and doubled tariffs on China, prompting jitters on global markets and fears the spat is devolving into a brutal trade war.
More than two-thirds of tequila produced in 2024 was exported to the United States – 335 million litres of almost 500 million, according to Mexico’s Tequila Regulatory Council.
The US market makes up 83.6 per cent of tequila exports, representing US$4.5 billion (S$6 billion) worth of liquor.
“The possible increase in tequila prices in the United States could encourage substitution with other alcoholic drinks,” said Ms Ana Cristina Villalpando Fonseca, head of the National Chamber of the Tequila Industry (CNIT).
The tariffs risk affecting the whole supply chain, from producers of agave – the plant used to make tequila – to bottlers and transporters, the CNIT added in a statement.
The industry employs more than 100,000 people in Mexico, Ms Villalpando said.
Fast-rising demand for tequila has seen American celebrities cash in on the tipple in recent years – and in 2020 tech billionaire Elon Musk joined the party with the launch of a limited edition Tesla Tequila.
In January 2025, tequila exports jumped 34.6 per cent compared with the same month the previous year, although the CNIT attributed the rise to stockpiling ahead of Mr Trump’s anticipated tariffs.
The CNIT said it would promote expansion to other international markets and that it was confident the Mexican government’s efforts will help mitigate the effects of the tariffs.
President Claudia Sheinbaum pushed back on Mr Trump’s duties, saying her government would retaliate with unspecified tariff and non-tariff measures of its own.
US Commerce Secretary Howard Lutnick said, however, that Mr Trump could dial down hefty levies on Mexico and Canada this week, while maintaining pressure on China. AFP
