Mexico eyes tariff retaliation to level playing field for tequila exports
Mexico will implement tougher tariff measures on imported alcoholic beverages to pressure other countries into reducing barriers on Mexican tequila, Economy Minister Marcelo Ebrard announced during National Tequila Day celebrations on Friday.
The announcement comes as Mexico seeks to address what it views as unfair trade treatment. While some markets impose tariffs as high as 150% on tequila imports, Mexico maintains relatively open policies for similar foreign products. India, for example, previously levied 150% tariffs on bourbon and other spirits before reducing them to 100% through negotiations.
"If another country applies 150 tariffs on me, I will say, 'Hey, I'm going to impose restrictions on your products too.' It's going to have to be more balanced."
Explosive growth in global markets
The stakes are substantial. Tequila exports reached nearly $4.2 billion in 2024, making the spirit Mexico's second-largest agro-industrial export after beer, which generated approximately $6.3 billion. The industry has experienced explosive growth, with U.S. imports of Mexican tequila surging 1,400% between 2000 and 2024, climbing from $350 million to $5.4 billion.
Mexico exported approximately 402 million liters of tequila in 2024, representing a 133% increase over the past decade. The spirit now reaches over 120 countries globally, though the United States remains the dominant market, accounting for 60-67% of global sales and importing over 334 million liters in 2024.
Tequila's market dominance has grown so substantially that it surpassed whiskey in 2023 to become the second most valuable spirit category in the United States, with sales totaling $6.5 billion. The product now accounts for over 14% of the U.S. agricultural trade deficit with Mexico.
Protected status and production challenges
Tequila received Denomination of Origin status in 1974, making it the first Mexican product with this certification. The designation ensures that only spirits produced in the states of Jalisco, Nayarit, Guanajuato, Michoacán and Tamaulipas using Blue Weber agave can legally carry the tequila name.
Director General of the Mexican Institute of Industrial Property Vidal Llerenas Morales emphasized that this status preserves the spirit's traditional characteristics and quality. Production, however, faces inherent vulnerabilities: Blue Weber agave requires five to seven years to reach maturity, and approximately 80% of cultivated plants are genetically identical clones, making them susceptible to disease outbreaks.
The USMCA trade agreement currently provides duty-free access for Mexican tequila exports to the United States, significantly boosting profit margins for producers. This favorable framework underscores why Mexico is motivated to protect and expand market access through retaliatory measures if necessary.
Tequila was the only major spirit category to register growth during the past year, with a 1.2% increase. Industry analysts project the global tequila market will continue expanding through 2030.
National Tequila Day, celebrated annually on July 24, recognizes the spirit's economic and cultural significance. The industry provides employment for thousands of families involved in agave cultivation and distillation throughout the designated production regions, contributing billions to Mexico's GDP.
Other Mexican spirits including mezcal, bacanora, sotol, charanda and raicilla have since received Denomination of Origin certification, following tequila's precedent in protecting Mexico's traditional alcoholic beverages.
