Tariffs might not happen. But tequila sellers already paid a price

Record ID: 1984482

  • Title: Tariffs might not happen. But tequila sellers already paid a price
  • Date: 17th March 2025
  • Summary: MARIANA, MINAS GERAIS, BRAZIL (FILE - NOVEMBER 2015) (REUTERS) VARIOUS OF BENTO RODRIGUES SUBDISTRICTS DESTROYED BY MUD FROM DAM HOUSE DESTROYED BY MUD MUD FLOWING DOWNHILL LANDSCAPE DEVASTATED BY THE DAM BREAK MUD FLOW RESCUE HELICOPTERS FLYING OVER TOWN COVERED BY MUD VARIOUS OF AERIAL SHOTS OF THE DAM THAT BURSTED AERIAL SHOT OF THE DEVASTATED LANDSCAPE AERIAL SHOT OF T
  • Embargoed:
  • Keywords: LOS ANGELES MEXICO MEZCAL NEW YORK TARIFFS TEQUILA TRUMP
  • Location: LOS ANGELES, CALIFORNIA, UNITED STATES
  • City: LOS ANGELES, CALIFORNIA, UNITED STATES
  • Country: US
  • Topics: Economic Events,North America
  • Reuters ID: LVA002833212032025RP1
  • Aspect Ratio: 16:9
  • Story Text: Even if U.S. President Donald Trump's tariffs on Mexico are not imposed, the threats and uncertainty caused by on and off-again levies have already cost the tequila sector money and could drive a temporary slowdown in sales, producers, investors and analysts told Reuters.
    The 25% tariffs, initially due to be applied from February and briefly in place on March 4 before being suspended on both occasions, threatened billions of dollars of imports from huge producers like Diageo and Becle alone.
    They prompted businesses and consumers to stockpile tequila, which can only be made in Mexico, freeze expansion plans and divert resources elsewhere.
    Some producers, restaurants and drinkers accumulated hefty tequila stock, sometimes of up to six months - a bet which will pay off if tariffs are imposed. But producers say this also has a cost, hurting the sector even if the tariffs are rolled back.
    The impact on tequila - a bright spot for the U.S. spirits industry amid a sharp downturn in broader spirits sales - shows the collateral damage of Trump's effort to rip up and remake global trade relationships in favor of the United States.
    Luis Arce Mota, owner and chef at La Contenta Oeste in New York, said Mexican President Claudia Sheinbaum's handling of the tariffs, which threaten to derail tequila's growth, made him feel more positive for the future.
    “I'm really optimistic. I mean, two months ago, I was a little bit, but after I see in the way, like, she handled the situation, I believe, you know, there is no tariffs on Mexico. And I believe it doesn't happen," he said.
    The restaurant ordered 120 cases of tequila and 80 cases of mezcal since January - about six months' supply, Mota said. He normally only buys around 20 cases at a time.
    "I'm going to have a lot of tequila (if tariffs are not imposed)," he said.
    Such behavior could make for a "very quiet" second quarter for the big tequila producers, analysts said.
    (Production: Jorge Garcia, Justin Nathanson)
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