Breaking news: The US government will pause implementing 25% tariffs on Canadian goods for at least 30 days.

In a post on X following a phone call with US President Donald Trump, Canadian Prime Minister Justin Trudeau said the leaders had agreed that “proposed tariffs would be paused for at least 30 days while we work together”.

“I just had a good call with President Trump,” he said. “Canada is implementing our $1.3 billion border plan – reinforcing the border with new choppers, technology and personnel, enhanced co-ordination with our American partners, and increased resources to stop the flow of fentanyl.”

Trump has also agreed to delay 25% tariffs against Mexico for 30 days following a conversation with Mexican President Claudia Sheinbaum.

However, Trump warned that the European Union would soon face tariffs.

US President Donald Trump’s new tariffs on imports from Canada, Mexico and China have rocked the drinks industry.

The tariffs, which take effect on February 4, include a 25% levy on all goods from Canada and Mexico and a 10% tariff on imports from China.

That’s bad news for spirits that can only be produced in their country of origin, such as Mexican tequila and Canadian whiskey.

Following the news, Constellation Brands’ share price fell 6.2%, Diageo went down 3.5% and Brown-Forman lost 2.5%.

Diageo has about 46% exposure to imports from Mexico and Canada, according to a Jefferies note. The brokerage firm expects fiscal 2025 forecast to be revised when the company reports on Tuesday.

Pernod Ricard has production sites in Canada, Mexico and China with about 6.3% of its sales from Mexico and Canada imports, according to Jefferies.

Tequila sold in the US accounts for 7% of Campari group’s sales and has been a key driver to its performance in the country, according to J.P. Morgan.

J.P. Morgan noted that about 85% of Constellation Brands’ consolidated sales are derived from Mexican beer and could potentially see a mid-20’s percentage impact to earnings.

Brown-Form faces tariffs on its tequila portfolio, which accounts for a mid-single digit percentage of US sales, according to J.P. Morgan.

Brown-Froman is also subject to retaliatory tariffs from Canada and Mexico, with its American whiskey portfolio a particular concern.

The alcohol industry was also hit by tariffs during Trump’s last trade war from 2018 to 2023.

This time around the Distilled Spirits Council of the United States urged President Trump to reconsider tariffs, cautioning that they could hurt the US industry and lead to retaliatory actions.

“At the end of the day, tariffs on spirits products from our neighbors to the north and south are going to hurt US consumers and lead to job losses across the US hospitality industry just as these businesses continue their long recovery from the pandemic,” DISCUS said in a prior statement.

American alcohol pulled from shelves in Canada

Multiple Canadian provinces have announced they are removing American alcohol from sale in their regions in response to Trump’s tariff on Canadian goods.

Among them was Manitoba Liquor and Lotteries (MBLL), a corporation owned by the government, which was told to stop ordering alcoholic products from the US and pull American products off the shelves of liquor stores

Manitoba Premier Wab Kinew said: “Trump’s tariff tax is an attack on Canadians.

“We’re stopping the sale of American products at Manitoba liquor marts.

“How you choose to spend your money is one of the most important decisions you as a consumer can make.

“There are plenty of great Manitoba breweries and distilleries to support instead.”

Ontario Premier Doug Ford wrote in a post on X: “Every year, LCBO sells nearly $1 billion worth of American wine, beer, spirits and seltzers. Not anymore.”

Drinks industry begs Trump to reconsider tariffs