Trump’s Tariff Convulsions Are Wreaking Havoc on Tequila Makers

Article content

(Bloomberg)-US President Donald Trump's threats to the initiative, the tariff threats against Mexico gives executives in the famous Tikila industry in the country a headache.

Article content

Article content

Many buyers rushed their orders after Trump postponed for the first time in measures for a month so that they could obtain goods across the border before the fees enter into force. Now that the other deadline approaches, the work dries up until the impact of the definitions becomes clear, as some payments are delayed amid the increasing stocks, according to producers in Galissco.

Article content

With high uncertainty, the seventh generation maker of Tikila argued that long threats could be worse than the same fees. “Customers do not want to adhere to now and sit on an expensive stock,” said Luis Fernando Camarina, 29, by phone.

Trump planted confusion this week about what the definitions will enter into force and when. After presenting a series of contradictory answers about its commercial political plans for Canada and Mexico, as well as the European Union, the President confirmed on Thursday that the United States will impose 25 % definitions on its neighbors on March 4 as planned, along with a 10 % tax on Chinese imports.

“If the definitions are imposed, we will see a negative impact, although the markets will adapt to time,” Camarina said. “Additional settings can cause more damage because they disrupt internal operations and supply chains.”

His family sells more than two -thirds of the aloe vera that he produces in the United States and its company, Camarena Tequila, already expects a 20 % decrease in the first half of the year. The blow to the broader Tikila sector may be more difficult, as more than 80 % of Mexico production north across the border.

Article content

Article content

While the February data – when the Trump tariff was suspended – it was not yet available, Tikila makers shipped 32 million liters for the United States in January, according to the industry organizer. This is nearly 35 % from the previous year and represents a 25 % jump from December, when buyers rushed to buy before the date of the first president's implementation on February 4.

Meanwhile, Cuervo Becle Saab warned on Thursday that it might face a success of $ 80 million if the United States imposed a tariff, although it was preparing for this scenario. “We have been proactively increased stocks in the United States through expected shipments between Mexico from Mexico and Canada,” said financial director Rodrigo de la Maza during a profit call.

Mexico was a monopoly on the production of Tikila since the mid -1990s when it was given the so -called asset state by the European Union, then, later, by free trade partners in North America, the United States and Canada. “The choice of her northern neighbor as a major market for her – because of both proximity and being home to millions of Mexicans who already drink it – took political decisions in Washington the issue” make it or break it “for the industry.

Article content

“It is a pivotal moment of Tickilla,” said Vas ART, OHbev's head of marketing, an agency based in Vancouver that focuses on alcoholic beverages. “We see madness from pre -emptive moves. Trademarks are anterior load like madness,” storage in the United States and in some cases until the import of stainless steel tanks from alcohol to be packed in bottles.

Even with the deadline on March 4, it seems that Salvador Rosalis hopes to get Rosalis. He said that the grandson of the 39 -year -old Tequila Cascahuin said that despite the continued production, he made uncertainty almost impossible to plan for the future.

“Did you launch this marketing campaign? Do we have to hire more American sellers? These are the questions that takla makers cannot answer at this moment,” said Rosalis on the phone. He added: “The American distributors are lagging behind the payments.” “I don't know if they feel pressure from the high inventory, but it is definitely worried us.”

Everyone and Camarena agreed that the only way in which Tequila's makers will survive in imposing definitions is to transfer part of the costs to their customers.

Article content

You can also feel pain in another place in the manufacture of drinks and tobacco in Mexico. The country starts from a record year for foreign investment in 2024, as the sector attracts the second money from abroad after transport equipment.

While the alcohol industry endured different pressure – from inflation to a decrease in sales led by young generations that drink it less – Solano of Monex said that uncertainty about the definitions is to cause greater damage. The beer sector is better placed to resist trade disorders, although separate sectoral fees on packaging materials such as aluminum can reach the margins. Spirits and wine, at the same time, are in the weakest position.

Also, the wine industry in Mexico was recently picking steam. In 2023, nearly four out of 10 bottles opened by hospitality companies were produced locally, an increase of eight times since 2020, according to the country, the head of the wine council in the country.

Although the sector exports only 5 % of what it produces, the executives started searching north to expand, as American curious travelers discovered Mexican wine through the tourism sector. But these plans will now have to wait.

“I think Trump's strategy is that there will be a loaded rifle in Mexico, which will lead to uncertainty and disturbances over the next four years,” Abedoub said.

Article content