Beer Marketer's Insights - Tariff Tumult: Mexico and Canada Granted Another Month-Long Reprieve

Just 2 days after 25% tariffs on Mexico and Canada officially took effect, President Trump abruptly pivoted once again by announcing that Mexico "will not be required to pay Tariffs on anything that falls under the USMCA Agreement" in deal that lasts thru April 2nd. "I did this as an accommodation, and out of respect for, [Mexico's] President Sheinbaum," he wrote on Truth Social, praising her "hard work and cooperation" on immigration and fentanyl. Move follows previous 1-month delay and would appear to exempt many Mexican goods, but nothing definitive on Mexican beer and alc bevs at press time. It also comes just a day after Trump Admin announced a 1-month exemption for US automakers Ford, GM and Stellantis under USMCA. And just minutes ago, Wall St Jnl reported that the US will pause tariffs on compliant goods from Canada too thru Apr 2. "The exemption will cover about half of the imports from Mexico and about 37% of imports from Canada," according to a White House official. Recall, United States-Mexico-Canada agreement was negotiated during Trump's 1st term and allows goods to move between the countries tariff-free if they comply with rules requiring that a product be entirely made or substantially transformed in North America.Canadian Provinces Pulling US Alc Products Before news of temporary pause, and on top of Canada's retaliatory 25% tariffs on US goods (including beer, wine and spirits), several Canadian provinces had begun pulling American alcohol products off store shelves. The Liquor Control Board of Ontario (LCBO) ceased purchasing and selling all US-produced alc bevs despite having already purchased existing inventory. Org said it'd continue same course of action until "directed to resume normal business," stifling American alc bev sales in Canada's most populous province. "At least five other Canadian provinces&hellip; have taken similar actions against American alcohol," the Washington Post reports, including Manitoba, Nova Scotia, British Columbia, New Brunswick plus Newfoundland and Labrador, with Quebec also following suit."Worse Than a Tariff," per Brown-Forman CEO Removing products is "worse than a tariff," said Brown-Forman ceo Lawson Whiting on earnings call yesterday. "It's literally taking your sales away," he added, calling it a "disproportionate response." Canada only accounts for 1% of B-F's total sales, and co reported better results in latest qtr with net sales down 3% vs yr ago, +6% organically. B-F reaffirmed its annual forecast of +2-4% organic net sales and profit growth in fiscal 2025 including tariff impacts. But tariff threats remain an overhang, and all bets are off after Apr 2.

Tariff Tumult: Mexico and Canada Granted Another Month-Long Reprieve

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