Mexico’s booming tequila industry was left reeling Wednesday after US President Donald Trump slapped sweeping tariffs on the Central American nation that producers say threaten the popularity of its most famous liquor.
Trump imposed 25 percent levies on Mexico and Canada, and doubled tariffs on China, prompting jitters on global markets and fears the spat is devolving into a brutal trade war.
More than two-thirds of tequila produced last year was exported to the United States — 335 million liters of almost 500 million, according to Mexico’s Tequila Regulatory Council.
The US market makes up 83.6 percent of tequila exports, representing $4.5-billion worth of liquor.
“The possible increase in tequila prices in the United States could encourage substitution with other alcoholic drinks,” said Ana Cristina Villalpando Fonseca, head of the National Chamber of the Tequila Industry (CNIT).
The tariffs risk affecting the whole supply chain, from producers of agave — the plant used to make tequila — to bottlers and transporters, the CNIT added in a statement.
The industry employs more than 100,000 people in Mexico, Villalpando said.
Fast-rising demand for tequila has seen American celebrities cash in on the tipple in recent years — and in 2020 tech billionaire Elon Musk joined the party with the launch of a limited edition Tesla Tequila.
In January 2025, tequila exports jumped 34.6 percent compared to the same month the previous year, although the CNIT attributed the rise to stockpiling ahead of Trump’s anticipated tariffs.
The CNIT said it would promote expansion to other international markets and that it was confident the Mexican government’s efforts will help mitigate the effects of the tariffs.
President Claudia Sheinbaum pushed back on Trump’s duties saying her government would retaliate with unspecified tariff and non-tariff measures of its own.
US Commerce Secretary Howard Lutnick said however that Trump could dial down hefty levies on Mexico and Canada this week, while maintaining pressure on China.
