Canadian Whisky, Tequila to Be More Expensive With U.S. Tariffs

As expected, President Donald Trump announced plans to impose 25 percent tariffs on all imported goods from Canada and Mexico on his first day in office. Trump wants the tariffs to take effect on February 1, and affect Canadian Whisky and Mexican Tequila, along with oil, gas, and other imports from the two countries.

The move is expected to raise prices for U.S. consumers, since the tariffs are not paid by the exporting country, but by the American importer of those goods. Trump had threatened global tariffs on his first day in office, saying the U.S. would collect billions of dollars from foreign governments. However, he did not announce plans for tariffs on China and other trading partners on his first day, and his flood of executive orders did not include the Canada and Mexico tariffs.

The U.S. remains the largest market for Canadian whisky sales, according to data from the Distilled Spirits Council. Diageo is expected to be hardest-hit, since Crown Royal is the largest-selling Canadian whisky in the U.S. and the company acts as its own importer in the U.S. market.

Canadian Prime Minister Justin Trudeau pledged Tuesday that his government would respond forcefully to a U.S. tariff, including a dollar-for-dollar tariff on American goods. In addition, Ontario Premier Doug Ford has vowed to retaliate against any tariffs by pulling American-made whiskies and other alcoholic beverages from the province’s LCBO stores.

Trump also ordered federal agencies to review the impact of the U.S.-Mexico-Canada free trade agreement signed during his first term in office. The three countries depend on each other for significant amounts of trade, with Mexico and Canada accounting for about 30 percent of U.S. imports annually, along with a third of U.S. exports.

WhiskyCast has reached out to industry leaders in the U.S. and Canada for reaction to the tariffs. This story will be updated with additional information.