The Trump administration's proposed tariffs on Mexican beer have sparked controversy, with a new report arguing that the move would harm American workers.
The report, co-authored by Stephen Moore and David Ozgo, claims that tariffs on Mexican beer would squeeze one of the most profitable segments of the U.S. beer market, ultimately putting U.S. jobs at risk.
According to the report, most of the jobs supported by Mexican beer, such as distribution, wholesaling, and retailing, are in the United States.
Data shows that the U.S. beer business supports roughly 1.74 million jobs, but only about 5% are directly involved in brewing, with the remaining jobs held by wholesalers, retailers, restaurants, and suppliers.
Experts say that if tariffs are imposed, U.S. distributors, retailers, restaurants, and bars would lose out on the higher profits earned from Mexican beer sales, putting more American jobs at risk.
The report notes that Mexican beer already sells for about 52% more than mass-market domestic lagers in grocery and liquor stores, generating bigger profits for U.S. businesses and workers.
Every gallon of Mexican beer generates about $26.27 in economic value, with about $19.42 of that going to U.S. businesses and workers through various domestic economic activities.
By comparison, leading domestic beers generate about $15.76 in total value per gallon.
The report warns that tariffs would ultimately force brewers to either absorb the added costs or pass them on to consumers through higher prices, which would be detrimental to consumers and the economy.
Experts also argue that moving production of Mexican beer to the United States could undermine the brands' authenticity and value, pointing to Anheuser-Busch InBev's decision to move production of Beck's beer from Germany to Missouri.
Consumers value authenticity, and when an import is moved to the United States and marketed as an import, the value is lost.
The Trump administration has argued that tariffs are intended to encourage domestic manufacturing and strengthen American industry, but officials have not specified a final policy regarding Mexican beer imports.
