Tequila and Canadian whiskey producers are set for a temporary reprieve after US President Donald Trump signed orders significantly expanding the goods exempted from tariffs introduced this week.
In the second climbdown in as many days, Trump rolled back taxes on goods including whiskies and other alcoholic drinks on Thursday (6 March).
The month-long suspension of 25% import levies are understood to apply to around half of goods coming into the US from Mexico and around 38% of goods from Canada.
They include goods shipped under North America’s free trade pact, the US-Mexico-Canada agreement (USMCA).
Items currently imported to the US under the USMCA pact include televisions, air conditioners, avocados, beef and – crucially for global spirits companies – alcoholic beverages.
Trump’s decision to suspend tariffs was “great news for the Canadian, Mexican and US distilled spirits industries”, said Chris Swonger, president and CEO of the US Distilled Spirits Council.
“The USMCA has helped to ensure the continued growth of the US spirits and hospitality industries, promote job growth and drive economic prosperity across the nation,” Swonger said. “We are hopeful that constructive dialogues continue between the US, Canada and Mexico that permanently bring back zero for zero tariffs for spirits trade between our three countries.”
The reprieve is also likely to be welcomed by the likes of Diageo and Campari, both of which had warned tariffs on tequila and Canadian whisky would hit profits.
Approached by The Grocer, Diageo declined to comment.
The climbdown comes after some Canadian provinces removed alcoholic drinks produced in the US from sale in response to US tariffs this week.
The Liquor Control Board of Ontario (LCBO) removed US-made alcoholic drinks from its shelves on Tuesday, a move described by Brown-Forman CEO Lawson Whiting as “disproportionate” and “worse than a tariff”.
“I mean, that’s worse than a tariff, because it’s literally taking your sales away, [and] completely removing our products from the shelves,” Whiting said on a post-earnings call on Wednesday (5 March).
In response to the tariffs, Canada has also retaliated with 25% levies on US goods including beer, spirits and wine.
Ottowa would now not move forward with a second tranche of previousy planned levies, Finance Minister Dominic LeBlanc said on social media site X yesterday (6 March).
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