US President-elect Donald Trump has indicated plans to implement 25% tariffs on all imports from Canada and Mexico when he assumes office in January.
These tariffs are intended as a response to what he sees as a flow of fentanyl and migrants across the US borders.
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In a post on social media platform Truth Social on Monday (25 November), Trump said: “On January 20th, as one of my many first Executive Orders, I will sign all necessary documents to charge Mexico and Canada a 25% Tariff on ALL products coming into the United States, and its ridiculous Open Borders.
“This Tariff will remain in effect until such time as drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our country! Both Mexico and Canada have the absolute right and power to easily solve this long simmering problem.”
Responding to the announcement in a post on X yesterday (26 November), Mexico’s president Claudia Sheinbaum said: “Migration and fentanyl consumption will not be addressed with threats or tariffs… Dialogue is the way forward.”
The tariffs could drive up the prices of spirits like Tequila and Canadian whisky, as well as foods such as avocados, and strawberries, boosting costs for US consumers. The move has also raised concerns about potential job losses, compounding the economic impact domestically.
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By GlobalDataIn a statement, the Distilled Spirits Council of the US (DISCUS) president and CEO Chris Swonger said that tariffs on spirits products from Mexico and Canada are going to “hurt US consumers and lead to job losses across the US hospitality industry”.
Meanwhile trade association, Spirits Canada said that the US is “largest export market for Canadian whisky” and expressed willingness to “work closely” with the US and Canadian governments to “resolve trade differences”.
Data shared by DISCUS showed the US imported $4.6bn worth of Tequila and $108m worth of mezcal from Mexico last year, while the sales of Tequila and mezcal supplier in the US increased by 7.9%, reaching $6.5bn.
Mexico also ranked as the third-largest export market for US distilled spirits, with exports totalling $139m.
The US imported $202.5m worth of whisky from Canada in 2023, along with $537m worth of Canadian spirits.
Canada was the second-largest export market for American spirits, with exports reaching $255m.
On food items, US House Agriculture Committee ranking member David Scott noted: “Every single day, Americans visit grocery stores and buy food imported from Canada and Mexico.
“Trump’s tariffs will cost us at the grocery store, in our homes, and make it harder for American farmers to stay in business.”
According to the USDA, two-thirds of US vegetable imports and half of fruit and nut imports come from Mexico.
This includes nearly 90% of avocados, up to 35% of orange juice, and 20% of strawberries.
The US market accounts for about 80% of Mexico’s avocado exports, a trade valued at close to $3bn in the previous year.
Speaking to Just Drinks, Agri-Food Analytics Lab senior director Sylvain Charlebois said Canadian agri-food sectors such as livestock, grains, seafood, and fresh produce are “most at risk from Trump’s tariff threats”.
In 2023, the US imported $40.5bn worth of agricultural products from Canada, including baked goods, canola oil, beef, pork, chocolate, and frozen fries.
“A 25% tariff would drastically erode margins, disrupt supply chains, and discourage American buyers, creating ripple effects across the industry,” Charlebois added.
Responding to Trump’s plan, Canadian Chamber of Commerce president and CEO Candace Laing said: “Being America’s ‘nice neighbour’ won’t get us anywhere in this situation. President-elect Trump’s intention to impose 25% tariffs signals that the US-Canada trade relationship is no longer about mutual benefit. To him, it’s about winners and losers – with Canada on the losing end.”
