Trump tariffs spell trouble for Diageo

Since Trump’s tariffs have fully gone into effect, drinks megabrand Diageo is feeling the sting.

With drink prices already rising this year, the ongoing trade war could hike these prices even higher, as North America is Diageo’s biggest region, representing about 40% of net sales and almost half of the company’s operating profit.

The tariffs hit at 25% for a lot of Canadian and Mexican drinks, started on March 4. China got 10% from February 4, which increased to 20% on March 4. The EU has imposed 50% from April 1, and the US has threatened 200% in return. All beer imports have been hit with 25%.

Frederic Zeimett, CEO of Champagne Leclerc Briant, has said to CNBC that “If [tariffs] goes up to 200%, that’ll be game over. The U.S. market will be finished.”

Before the tariffs were set in place, Diego complained in a letter to the US Trade Representative that its brands are crucial to Americans: “Diageo’s ability to supply US consumers with iconic brands that must be produced overseas is essential to supporting US production, sales and distribution jobs, as well as the indirect benefits to the US economy.”