Diageo faces tequila hangover with Trump’s tariffs set to wipe $200m off the drinks giant’s profits

Diageo has warned of a £161million hit to profits from Donald Trump’s tariffs, including on tequila from Mexico.

The Guinness maker has been left reeling after the US President said he would whack a 25 per cent charge on goods imported from Canada and Mexico.

Looming charges could damage ‘building momentum’ for tequila brands made in Mexico, including George Clooney’s Casamigos and Don Julio, as well as Canadian whiskies such as Crown Royal, the firm warned. 

Diageo is seen as one of the British businesses with most to lose from tariffs, which are due to be implemented by the US on Mexico and Canada in March after a one-month delay.

The hit would be even harder if the US slaps tariffs on the UK – battering Diageo’s whisky exports to America.

The fears of a trade war cast a shadow over its trading update, sending shares slipping 1.6 per cent, or 37.5p, to 2327.5p.

Shares have already plunged as the firm grapples with a consumer slowdown, including Gen Z shunning alcohol and a sales slump in Latin America.

The group scrapped its sales guidance yesterday, blaming uncertainty surrounding the tariffs, which were announced at the weekend.

Chief executive Debra Crew said: ‘We are taking a number of actions to mitigate the impact and disruption to our business that tariffs may cause.’

Diageo is the most exposed drinks giant to these changes, followed by Campari and Pernod, a note from investment bank Jefferies said.

Canadian whisky and Mexican tequila imported into the US account for a tenth of Diageo’s sales and profits. 

JP Morgan Chase believes Diageo would have to raise prices by a fifth to offset the hit to earnings if tariffs are imposed.

Sales fell by 0.6 per cent to £8.8billion in the six months to December 31, adding further pressure onto Crew to steer the group to better fortunes.

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