President Donald Trump carried out his promise to impose broad tariffs on imports from nations all over the world during his first year in office. Many were concerned that this would directly impact Americans by driving up the cost of everyday products.
And the effects are beginning to show, especially in the hospitality sector, where a wave of new alcohol tariffs is driving up costs and changing the selection of drinks offered on menus. Since many wines and spirits sold in the U.S. are imported, the new tariffs have an impact on them.
The impact of import taxes on restaurants and bars
Restaurants and bars are feeling the pressure because with tequila, Scotch whisky, and amaro among the most common cocktail ingredients, cocktail drinkers will be especially impacted. Because it is difficult to replicate these drinks in the United States, vendors have to pay the higher prices or remove the items from their menus.
“Tariffs are certainly going to continue to impact the bar and cocktail industry in 2026,” stated Alex Jump, director of operations and proprietor of The Peach Crease Club in Denver. “The majority of the items we sell at the bar are international.”
According to Jump, his bar is not thinking about taking things off the menu. But that leaves them with two unpleasant choices: increasing consumer prices or compromising the company’s survival.
Drinks are not the only items whose prices have increased; glassware, furniture, and plastic goods often come from other countries. Even a slight increase in unit prices can completely eliminate a company’s profits in the narrow profit margins of the hospitality sector.
The founding lawyer of Sprint Law Partners, Marbet Lewis, stated that “Tariff hikes are still causing widespread disruption within the alcohol industry.” Lewis additionally said she is already collaborating with merchants who have changed their menus to eliminate expensive imported beverages.
What’s behind the rising cost of cocktails
Bars and restaurants don’t profit much from every single thing they sell. According to Reuters, their average profit margins are typically only 3–5%, which means that if the cost of their supplies increases just a little, they risk losing money unless they raise prices or change the products they sell.
The majority of the alcohol consumed in the United States is imported. In fact, in 2024, wine and spirits valued at €3.8 billion were shipped to the United States from France alone. Before those bottles even get to a bar or store, their price increases when the government imposes tariffs (additional taxes on imports).
It goes beyond the drinks themselves. U.S. tariffs on aluminum imports were doubled to 50%, impacting businesses that depend on aluminum packaging. As a result, the cost of producing even beer and canned cocktails has increased as well.
Customers start noticing changes as a result of all of this:
- Some imported beverages disappear.
- Cheaper ingredients are used to make cocktails.
- Prices gradually increase.
So even if it’s not obvious right away, tariffs end up affecting what people can order and how much they pay at bars and restaurants.
A broader impact reshaping local economies
Long-term, there are worries that other industries could be negatively affected by a major hit to the hospitality sector. Restaurants and bars are often the center of local communities, a big source of employment, and a major source of revenue for farmers and suppliers.
“Everyone takes a hit when a restaurant fails,” says Vic Christopher, president and founder of Troy, New York’s Clark House Hospitality.
Although it has been announced that Americans will receive a rebate check from the tariff revenue, it is not certain whether this will compensate for the price increase caused by the tariffs themselves.
