Our associations are committed to working collaboratively with all stakeholders to explore solutions that prevent potential tariffs on distilled spirits. We are deeply concerned that U.S. tariffs on imported spirits from Canada and Mexico will significantly harm all three countries and lead to a cycle of retaliatory tariffs that negatively impacts our shared industry.
Maintaining fair and reciprocal duty-free access for all distilled spirits is crucial for supporting jobs and shared growth across North America. Our industries have thrived due to the level playing field established across our borders.
The North American spirits sector is highly interconnected. Many companies own brands in all three countries, contributing positively to local economies. Certain spirits, such as Bourbon, Tennessee Whiskey, Tequila and Canadian Whisky, are recognized as distinctive products and can only be produced in their designated countries. Bourbon and Tennessee Whiskey can only be made in the U.S., Tequila in Mexico, and Canadian Whisky in Canada. The imposition of a tariff not only negatively impacts trading partners but also harms domestic industries.
Since the 1990s, trade in spirits in North America has been largely tariff-free, resulting in significant growth. U.S.-Canada trade in spirits increased by 147%, while U.S.-Mexico trade surged by 4,080%. This demonstrates how vital our cooperative efforts have been for job creation and economic stability.
However, recently the North American spirits sector is experiencing a slowdown due to the continued impact of COVID and economic factors like inflation. This slowdown will be exacerbated if a cycle of tariffs and matching retaliation begins, and the impact will be felt not just by the distilled spirits industry, but also by consumers and the struggling hospitality sector, which is still recovering from the pandemic.
We urge all parties to engage in constructive dialogue to address these concerns proactively and maintain our shared commitment to a thriving spirits industry across North America.
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