The Trump administration halted tariffs on most nations on April 9, excluding Mexico and Canada, and the tariffs could increase prices at bars that heavily rely on import-based alcohols, said Mark Baker, a business and law emeritus professor.
The United States placed a 25% tariff on all items imported from Mexico and Canada that are not a part of the United States-Mexico-Canada Agreement List, which was created in 2020 to manage trade between the countries. The tariffs are meant to reduce the smuggling of drugs, according to a White House press release.
Tequila producers began to shift their market outside of the U.S. due to the quick changes and uncertainty in tariffs caused by the Trump administration. Baker said he expects Canada and Mexico to be targeted on their most successful export products, such as cars and food. He said tequila and other alcohol from the two countries will be affected by the tariff.
“These tariffs have been instituted so quickly that we are still really in the process of working out what is covered and what is not, and we have not determined exactly how that will play out,” Baker said.
Victory Lap, a sports bar located in West Campus, sells $2 margaritas every Tuesday, bartender Hugh McCarthy said.
“Most of your margarita is tequila,” McCarthy said. “If 25% tariffs go up, maybe it’s gonna have to be $3 margaritas, not $2 margaritas, maybe $4. I don’t know. It is a very competitive industry, and depending on the liquor, the margins can be high or they can be low, but for the most part, the prices that you are charging your customers really are based on your wholesale prices.”
West Campus bar Cain & Abel’s ordered about 30% more alcohol than average in the past two weeks in preparation for the tariffs, bar manager Megan Knapp said.
“We just ordered our last liquor order, a bigger order than usual, just to prepare, knowing that we might be losing profit,” Knapp said. “We might be replacing those beers, alcohol, tequila and stuff like that. But every bar needs tequila, so we’re looking at hiring our prices for sure.”
Music sophomore Sam Stricklin said he frequents the bars near campus about once a week.
“It’s unfortunate, for sure, that it would impact something so heavily just to go out with friends, that it would be more expensive,” Stricklin said.
The bar is catered towards college students because the prices are affordable, Cain & Abel’s bartender and biology senior Giulia Mayhua Pezo said.
“There’s the possibility that a lot of people don’t want to buy (alcohol) anymore,” Pezo said. “So that means they don’t tip, because my job is tip-based, I only earn $2 an hour and everything else is tip-based.”
Baker said the methodology the Trump administration uses to apply the tariffs is controversial because it causes people to “suffer,” and not everyone understands the reason behind it.
“When tariffs are used, they are not always used to punish people’s pocketbooks,” Baker said. “They’re also used quite often as an instrument of political power.”
