Valle De Guadalupe, Mexico: Tequila producers in Mexico are voicing deep concern as the possibility of a 25% tariff on imports from the U.S. threatens to disrupt years of hard work and jeopardize their livelihoods. The looming tariffs, if implemented, could potentially unravel businesses that have been carefully cultivated in the highly competitive spirits industry.
Melly Barajas, owner of Azteca Wines and Spirits, an all-female-staffed distillery in the heart of Jalisco state, explained that the production process for tequila demands meticulous planning months in advance—from securing ingredients to hiring seasonal staff. The threat of tariffs has effectively frozen the entire supply chain, forcing businesses like hers to halt operations in limbo.
“We are on hold and praying that they please try to think things through and not do this,” Barajas stated in an emotional plea from her office, where the flags of the U.S., Canada, and Mexico are prominently displayed. Her words echo the concerns of many in the industry who are now facing financial uncertainty.
Mexican tequila manufacturers are anxious about a potential 25% US import tax that could harm businesses they've spent years building https://t.co/KI6O9LilDy pic.twitter.com/MDTwy3FYGh
— Reuters (@Reuters) February 17, 2025
The proposed tariff stems from U.S. President Donald Trump’s assertions that Mexico and Canada have failed to sufficiently curb the flow of immigrants and fentanyl into the United States. However, after bilateral talks on February 3, the U.S. agreed to delay the implementation of the tariffs for 30 days, following promises from both Mexico and Canada to reinforce their borders.
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Tequila, made from the agave plant, has seen a significant rise in popularity, with 2023 marking a milestone where it surpassed whiskey to become the second best-selling spirit in the U.S. after vodka. In fact, tequila imports from Mexico to the U.S. reached a record $3.8 billion during the first nine months of 2024, marking a 13% increase from the previous year. This increase has outpaced the combined imports of whiskey, rum, gin, brandy, and vodka.
As with other iconic products such as French champagne or Italian parmesan, tequila and mezcal are region-specific products protected by international regulations. These tariffs could lead to higher prices for U.S. consumers, threatening both the Mexican distillers and the broader hospitality sector. Industry groups across North America warn that such tariffs could harm jobs and further delay the recovery of the hospitality industry, still grappling with the aftermath of the COVID-19 pandemic.
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Barajas voiced concerns about the potential fallout for U.S. buyers, suggesting that they might shift to other alternatives if tariffs are enacted. While the tequila market is slowly growing in countries such as Germany, Spain, and Russia, Barajas noted that this shift would take time and would not compensate for the potential loss in U.S. market share.
“The uncertainty is affecting the girls, the whole production system, everything we have worked for during so many years, because of a tariff,” Barajas lamented, underscoring the collective anxiety gripping the industry.
