If you enjoy tequila – whether straight or in a margarita – or are a fan of Modelo beer, brace yourself for a potentially higher bar tab if President-elect Donald Trump’s tariff plan takes effect, imposing a 25% tax on all goods imported from Mexico.

Likewise, those who prefer Canadian whisky might also see increased prices due to these policies.

Trump stated that the tariffs aim to exert pressure on illegal immigration and drug trafficking into the U.S., as he shared on his social media platform, Truth Social, earlier this week.

While it remains uncertain if these tariffs will actually be implemented – as Trump may be using them as leverage in future trade negotiations – beverage manufacturers are already concerned about the possible effects.

Bump Williams, of Bump Williams Consulting in Shelton, Connecticut, indicated that all alcoholic beverages imported from Mexico and Canada would likely see a rise in retail prices if these tariffs were enacted. This includes every type of Mexican beer and tequila, along with products sourced from Canada.

The rationale is straightforward; any tariffs imposed ultimately shift the financial burden onto consumers in the form of higher prices.

Furthermore, when the U.S. imposes tariffs on incoming goods, it often leads to reciprocal measures from other countries against U.S. exports. “Typically, there are very few, if any, exceptions to this,” Williams explained in an email to YSL News. “This will negatively impact all of our exports to these nations, primarily affecting Bourbon and Whiskey, followed by Vodka.”

Mexican President Claudia Sheinbaum warned that a tit-for-tat tariff situation could lead to economic inflation and job losses in both nations. She read from a letter intended for Trump, cautioning that “one tariff will lead to another in retaliation, endangering our joint businesses.”

Nevertheless, if the tariffs do come into effect, they will have implications for consumers as well as U.S. industries. Here’s what to expect.

What will tariffs mean for the pricing of imported beer and spirits?

If you’re a fan of alcoholic beverages, you might end up paying more. American taste for Mexican tequila and mezcal has surged, with imports reaching $4.66 billion in 2023, marking a 160% increase since 2019, as reported by the Distilled Spirits Council of the U.S.

A typical 750-milliliter bottle of tequila priced at $25-$50 could rise to between $31.25 and $62.50 due to the potential impact of a 25% tariff. Likewise, a similar bottle of Canadian whisky could go from $40 to $50.

On the other hand, a six-pack of Modelo Especial Lager – the top-selling beer in the U.S. – might jump in price from about $11 to $13.75.

Investors are already anticipating the challenges for Constellation Brands (which markets Modelo, Corona, and Pacifico, alongside Casa Noble Tequila) and Diageo (owner of Casamigos and Don Julio tequilas). On Tuesday, Constellation’s shares dropped by 3%, while Diageo saw a 1.4% decline.

The tariffs might also spike prices for other imported products like avocados from Mexico and oil and wood from Canada.

Despite market fluctuations, many observers don’t expect Trump to act immediately. Instead, experts like Williams suggest this represents Trump’s “opening move” to stimulate U.S. businesses and negotiate lower export taxes. “His approach to negotiations is both strategic and calculated,” Williams added.

This situation might also serve as a precursor to renegotiating the U.S.-Mexico-Canada Agreement (USMCA), the free trade deal that Trump established during his first term, commented Peter Tabor, an attorney and senior policy advisor at Holland & Knight.

Implementing tariffs may breach the USMCA, which is set for renegotiation in 2026. Such heavy tariffs could tarnish the U.S.’ reputation as a dependable trade associate, prompting importers to seek alternatives, he noted.

What are the potential impacts of tariffs on tequila, Mexican beer, and Canadian whisky?

According to Chris Swonger, president & CEO of the Distilled Spirits Council, tariffs can trigger widespread economic repercussions. He noted that a tariff dispute over spirits could impact everyone from farmers growing grains for distillates to bartenders and restaurant owners, ultimately affecting the entire American economy.

During Trump’s previous administration, tariffs were placed on steel and aluminum, which led to the European Union imposing a 25% tariff on American whiskeys. This move contributed to a shocking 20% drop in U.S. whiskey exports to the EU, plummeting from $552 million in 2018 to $440 million in 2021, data from the council shows.

However, when the tariff was lifted during the Biden administration in October 2022,

In 2022, whiskey exports saw a remarkable rise of 29% compared to the year before.

However, according to the agreement, the EU may impose a 50% tariff or a 25% tariff by the end of March 2025 if no new arrangement is established.

Swonger emphasized that border security and drug-related issues are significant concerns. “We will collaborate with our counterparts and all affected nations to find common ground with the newly elected Trump administration, ensuring a flourishing American economy and hospitality sector,” he stated.