Diageo warns $200M profit loss from Trump tariffs

Diageo, the parent company of brands like Guinness and Johnnie Walker, has warned that proposed U.S. tariffs on imports from Mexico and Canada could result in a $200 million hit to its operating profits. Approximately 45% of Diageo's U.S. revenues come from products produced in these countries, particularly tequila and Canadian whisky. The company plans to mitigate about 40% of this potential financial impact by increasing inventory and adjusting its supply chain before the tariffs take effect. CEO Debra Crew acknowledged the fluidity of the situation, stating that Diageo is proactively preparing for various scenarios, including potential retaliatory measures from Mexico and Canada. Despite the challenges, Diageo's recent earnings report showed growth in its tequila segment and a notable performance for Guinness, which has attracted younger drinkers. The uncertainty surrounding tariff implementation has led Diageo to abandon its sales growth targets for the foreseeable future.