Diageo Urges USTR To Favor “Rules of Origin” Over Tariffs

Diageo has submitted a letter to the U.S. Trade Representative putting forward an alternative to tariffs on imported brands. The proposal centers around “rules of origin” that would favor products for which the materials and manufacture are sourced within the United States and its strategic trade partners.

According to Diageo, the move would improve America’s supply chain while preventing other nations from circumventing tariffs via American trade partners. In addition, Diageo’s letter notes that the spirits sector is a reciprocal trade and therefore not prone to trade imbalances in the first place.

Under Diageo’s framework, Tequila would continue to trade freely, as Mexico is a strategic trade partner (defined in the letter as any nation with an existing trade agreement with the U.S.), as would Canadian whisky. That would allow Diageo to continue to avoid tariffs on key brands like Don Julio, Casamigos, and Crown Royal.

Last year, those three brands combined for 12.6 million cases, according to Impact Databank’s estimate. Crown Royal, at 7.2 million cases, is one of the most valuable spirits brands in the U.S. In 2024, Don Julio was a bright spot during a challenging year, growing nearly 40% to 3.4 million cases, while super-premium-plus sibling Casamigos was at 2 million cases after a significant decline.—Shane English

Tagged : Casamigos, Crown Royal, Diageo, Don Julio

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