On Feb. 1, President Donald J. Trump implemented a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China. Energy resources from Canada will have a lower 10% tariff, the Fact Sheet stated. 

However, news outlets, including The New York Times and The Washington Post, were reporting on Feb. 3 that the President announced a one-month pause on the 25% tariff on goods imported from Mexico after President Claudia Sheinbaum agreed to immediately send 10,000 soldiers to the U.S. border to prevent drug trafficking from Mexico.

AP News later reported on Feb. 3 that a one-month pause also has been applied to imports from Canada following negotiation discussions with Canadian Prime Minister Justin Trudeau in which he pledged additional cooperation on border security.

In response to the initial order, associations released the following statements.

The Consumer Brands Association issued the following statement from Tom Madrecki, vice president of supply chain resiliency in response to the Trump administration’s tariffs on imports from Canada and Mexico:

“As the country’s largest domestic manufacturing sector by employment, supporting more than 22 million American jobs and contributing $2.5 trillion to the U.S. GDP, the consumer packaged goods industry supports a strategic ‘America First Trade Policy’ that protects American jobs and keeps food, beverage, household and personal care products affordable. Tariffs on all imported goods from Mexico and Canada ― especially on ingredients and inputs that aren’t available in the U.S. ― could lead to higher consumer prices and retaliation against U.S. exporters. Despite sourcing the vast majority of ingredients and inputs from U.S. farms, CPG companies depend on global supply chains for certain imports due to unique growing conditions and other limiting factors around the world. We urge leaders in Mexico and Canada to work with President Trump to protect consumers’ access to affordable products and remove tariffs that could contribute to grocery inflation.”

Meanwhile a joint statement was by the Distilled Spirits Council of the U.S., the Chamber of the Tequila Industry, and Spirits Canada on Tariffs on Imports from Canada and Mexico:

“Our associations are committed to working collaboratively with all stakeholders to explore solutions that prevent tariffs on distilled spirits. We are deeply concerned that U.S. tariffs on imported spirits from Canada and Mexico will significantly harm all three countries and lead to a cycle of retaliatory tariffs that negatively impacts our shared industry. Maintaining fair and reciprocal duty-free access for all distilled spirits is crucial for supporting jobs and shared growth across North America. Our industries have thrived due to the level playing field established across our borders.

“The North American spirits sector is highly interconnected,” the statement continued. “Many companies own brands in all three countries, contributing positively to local economies. Certain spirits, such as Bourbon, Tennessee Whiskey, Tequila and Canadian Whisky, are recognized as distinctive products and can only be produced in their designated countries. Bourbon and Tennessee Whiskey can only be made in the U.S., Tequila in Mexico, and Canadian Whisky in Canada. The imposition of a tariff not only negatively impacts trading partners but also harms domestic industries.

“Since the 1990s, trade in spirits in North America has been largely tariff-free, resulting in significant growth,” the statement continued. “U.S.-Canada trade in spirits increased by 147%, while U.S.-Mexico trade surged by 4,080%. This demonstrates how vital our cooperative efforts have been for job creation and economic stability. However, recently the North American spirits sector is experiencing a slowdown due to the continued impact of COVID and economic factors like inflation. This slowdown will be exacerbated if a cycle of tariffs and matching retaliation begins, and the impact will be felt not just by the distilled spirits industry, but also by consumers and the struggling hospitality sector, which is still recovering from the pandemic.

“We urge all parties to engage in constructive dialogue to address these concerns proactively and maintain our shared commitment to a thriving spirits industry across North America,” the statement concluded.

Margie A.S Lehrman, CEO at American Craft Spirits Association (ACSA), also released the following statement: “On behalf of our community of more than 3,000 independent craft distilleries, the American Craft Spirits Association (ACSA) is deeply concerned about the impending threat of tariffs on important trade partners, including Canada and Mexico. This is yet another blow to our small business manufacturers who are already operating in a deeply challenging marketplace.  Placing tariffs on imported goods will strip U.S. manufacturers of shelf space, increase production costs, and hinder the development of relationships abroad.

“While we appreciate the Trump Administration’s decision to delay any tariffs on Mexico and Canada and recognize the importance of preventing illegal drugs and illegal migrants from crossing our borders, ACSA strongly opposes the imposition of tariffs that impact the production and sale of distilled spirits when used in trade disagreements unrelated to distilled spirits,” Lehrman continued. “According to a recent survey of our members, Canada and Mexico serve as important trading partners for both our import and export market, and we rely heavily on their resources and agricultural ingredients to produce American-made craft spirits. 

“Indiscriminate tariffs will skyrocket the costs on these important materials, and as a result, craft spirits businesses will likely have no choice other than to raise prices in an already viciously competitive global marketplace,” she continued. “The end result will most certainly lead to the loss of American jobs or worse, the closure of many of these small businesses. The more than 30,000 US workers employed by this segment of American manufacturing will face uncertainty.  

“In our current business climate, these tariffs compound the issues facing our community and threaten the future of craft spirits,” Lehrman continued. “Together with inflation, market access challenges, neoprohibitionist policies and the rampant glorification of heavily biased science, our industry faces a grim future without further action. Our government should support ‘Made in America’ ― not hinder our progress with bold political measures.

“Spirits and in particular, our coalition of small business manufacturers along with those who support our efforts ― from farmers, to cooperages, to yeast and ingredient companies, to glass manufacturers, to name just a few ― should not be dragged into a larger political dispute particularly at a time when so many of our small businesses are already fighting for survival,” she concluded.