Trump's tariff to make your favourite alcohol Johnnie Walker and Corona beer costlier? Details
Johnnie Walker whisky and Corona beer could be caught in the crosshairs of a potential trade war after Trump's move.
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Although Donald Trump has agreed to a 30-day pause on the tariffs on Canada and Mexico on Monday, the U.S. went ahead with the 10% levy on Chinese imports on Tuesday, prompting swift tit-for-tat tariffs from the country.
Canada and Mexico had both initially announced retaliatory tariffs had Trump gone ahead with 25% tariffs on their imports. Here is a list of global beverage companies likely to see an impact due to tariffs imposed by Trump:
— Diageo: Diageo is a British beverage company and is known for brands such as Johnnie Walker and Smirnoff vodka. Diageo withdrew its medium-term organic sales growth target on Tuesday as it took steps to try and mitigate the impact of US tariffs, according to Reuters. If tariffs are implemented from March 1, Diageo expects a gross impact of around $200 million on operating profit for the current financial year, mostly from tequila. The company has about 46% exposure to imports from Mexico and Canada, according to a Jefferies note. It has end-to-end tequila production is in Mexico.
-Pernod Richard SA: The French company, which produces well-known spirits such as Absolut Vodka and Jameson Irish Whiskey, has production sites in Canada, Mexico and China with about 6.3% of sales from Mexico and Canada imports, according to Jefferies. Affected brands include Codigo 1530 tequila and Jefferson's bourbon whiskey.
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