As the Trump administration looks into imposing tariffs on beer from Mexico, a recent report suggests this action might adversely affect the American workers it’s intended to protect. This report indicates that such tariffs could undermine one of the most lucrative segments within the U.S. beer market.
Authored by Stephen Moore, co-founder of Unleash Prosperity, along with economist David Osgo, the report arrives at a time when the administration is actively broadening its tariff strategies. Officials claim these moves are designed to bolster domestic manufacturing, reduce trade imbalances, and enhance U.S. industries.
“There are certainly products for which tariffs might be justified, particularly those tied to national security,” Osgo explained. “But beer, clearly, isn’t one of them.”
Even though Mexican beer is produced in Mexico, a significant number of jobs linked to it are found in the U.S., covering areas like distribution and retail. According to Ozgo, “The truth is, if tariffs are imposed on Mexican beer, American workers aren’t really being protected. Instead, you’re cutting into a highly profitable market segment, which could jeopardize American jobs.”
The report cites that the U.S. beer sector supports around 1.74 million jobs, but only about 5% of those are directly related to brewing. Many workers are involved in distribution, retail, bars, and restaurants, and these positions stay in the U.S., regardless of where the beer originates.
Interestingly, Mexican beer already typically costs about 52% more than domestic lagers in grocery and liquor stores. The authors argue that these higher prices lead to greater profits for American distributors and retailers, thereby supporting more U.S. jobs than the cheaper domestic alternatives.
This price elevation, they argue, adds value to the overall U.S. economy.
Each gallon of beer imported from Mexico is estimated to provide around $26.27 in economic value, with approximately $19.42—about 74%—going back to U.S. businesses and employees through logistics, retail, marketing, taxation, and other economic activities. In contrast, major domestic beers yield roughly $15.76 per gallon.
Ozgo highlights that implementing tariffs would ultimately compel brewers to either take on these extra costs, cut back on investments, or pass those costs onto consumers via increased prices. “It’s not a good situation, regardless of how you slice it,” he said.
The report also points out that shifting the brewing of Mexican beer to the U.S. could compromise its brand integrity. It references the case of Anheuser-Busch InBev, which faced legal challenges after relocating the production of Bex beer from Germany to the U.S., continuing to market it as if it were still German-made.
In addition, Constellation Brands, the company behind imports like Corona and Modelo, operates under a Department of Justice agreement requiring production to remain in Mexico.
“Consumers value authenticity,” Ozgo added. “If imports are continually moved stateside and sold as if they’re still imported, they’ll ultimately lose their appeal.”
The Trump administration maintains that the broader goals of these tariffs are to encourage U.S. manufacturing and strengthen domestic industries; however, a concrete decision regarding Mexican beer tariffs has not yet been communicated.
The White House did not respond to requests for comments on the matter.
Read the full report:
