Image may be NSFW. Clik here to view.(Photo: Brian Lawless/PA Wire, AP Images)
In an earnings call on Thursday, Jose Cuervo owner Becle told investors that it will face an $80 million impact if President Donald Trump follows through on his 25% tariff plan against Mexican goods.
Becle is the world's largest tequila producer, responsible for myriad recognizable brands including Cuervo, 1800 Tequila, Maestro Dobel and Kevin Hart's Gran Coramino.
Rodrigo de la Maza, chief financial officer for the company, notes that Becle has "proactively increased inventories in the U.S." to address the looming threat of tariffs. Like many other businesses based in Mexico and Canada, Becle has engaged in what's known as frontloading. By stocking inventories ahead of time, Becle could delay the higher prices passed onto consumers from tariffs by weeks, if not months, after they're imposed. Many of the most recognizable tequila brands in the U.S. have reportedly done the same amid escalating trade tensions.
However, whether or not Trump's much-discussed tariff plan will actually be implemented is yet to be seen.
The Trump administration had initially scheduled a 25% tariff on Mexican and Canadian goods to take effect on Feb. 1. Following last-minute negotiations with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum, the plan was delayed by a month. During a Cabinet meeting on Wednesday, Trump once again suggested that the tariffs would be delayed, this time to Apr. 2.
On Thursday, Trump reversed course in a Truth Social post. Tariffs are now scheduled to kick in on March 4, with Trump citing the alleged flow of fentanyl and immigrants across the border as key motivators.
"Drugs are still pouring into our Country from Mexico and Canada at very high and unacceptable levels. A large percentage of these Drugs, much of them in the form of Fentanyl, are made in, and supplied by, China," Trump wrote. "We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled."
The threat of tariffs has already affected liquor sales in certain regions.
Earlier this month, the Liquor Control Board of Ontario followed through on its promise to remove all American alcohol from its shelves. The move had initially been proposed by Ontario Premier Doug Ford as a tit-for-tat response to Trump's tariff scheme. The LCBO is responsible for distributing alcohol to nearly 40% of Canada’s population, pulling in a gross revenue of $7.4 billion in 2023. When customers arrive at its stores, they now find red-and-white signs that declare, “Buy Canadian Instead.”
[callout-app-promo]
