In Mexico's Valle de Guadalupe, Mexican tequila producers are facing the looming threat of a 25% U.S. import tax, causing concern that their hard-earned businesses could be jeopardized.
Melly Barajas, the owner of Azteca Wines And Spirits, a distillery run entirely by women in Jalisco state, expressed her worries about the impact of the potential tax on their meticulously planned operations. Barajas emphasized the necessity of forecasting everything in advance, from seasonal staff hires to sourcing ingredients in bulk, a process that is now at a standstill.
"We are on hold and hoping for a more considerate approach to this matter," Barajas remarked, reflecting from her office adorned with U.S., Canadian, and Mexican flags.
In response to President Donald Trump's proposition of a blanket 25% tariff on major trade partners Mexico and Canada, concerns have been raised. The initial tariff proposal was later revised after commitments from both countries to reinforce border security measures.
Tequila, a popular spirit made from the agave plant and commonly used in beverages like margaritas, has seen a significant rise in demand. By 2023, tequila had become the United States' second best-selling spirit after vodka, surpassing whiskey.
In the first nine months of 2024, the U.S. imported $3.8 billion worth of tequila, marking a 13% increase from the previous year, exceeding combined imports of whiskey, gin, rum, brandy, and vodka, as reported by the U.S. Distilled Spirits Council.
Considering that products labeled as tequila or mezcal must originate from Mexico, any tariffs imposed would likely result in price hikes for U.S. consumers. Industry experts also warn that the proposed tariffs could have adverse effects on the hospitality sector, still in the process of recovering from the impact of the COVID-19 pandemic. Barajas highlighted that if tariffs are enforced, American consumers might opt for alternative beverages. While countries like Germany, Spain, and Russia have shown growing interest in tequila, adoption is gradual.
Barajas expressed how the prevailing uncertainty due to the tariff issue is affecting their team, production processes, and the years of effort dedicated to building their business.