Will Modelo and Corona brewing move from Mexico to the US?

Union pressure for tariffs to “brew it here”

Last month the International Brotherhood of Teamsters urged President Trump to slap steep tariffs (as high as 75%) on Mexican-imported beer, insisting iconic brands like Modelo, Corona, Pacifico and Tecate should instead be brewed in U.S. plants. Teamsters chief Sean O’Brien told Fox News: “We can brew Modelo beer. It’s the same recipe. Let’s brew it in the United States. We are very good at producing goods and services in this country”.

In a formal submission to the U.S. Trade Representative (USTR), the union highlighted that Mexican beer output has surged (up ~85% since 2014) and roughly 80-85% of Mexico’s beer exports go to the U.S.. In the same period, capacity use at major U.S. breweries fell from about 82% to 65%. The Teamsters argue that lower Mexican labor costs, tax incentives (Mexico’s 2023 export tax breaks and “Plan México”), and subsidies are giving Mexican producers an unfair edge. They claim U.S. brewery jobs and allied industries (barley, hops, cans, trucking, distribution, etc.) are being hollowed out as big brewers invest in new Mexican plants.

According to news reports, AB InBev’s Grupo Modelo and Heineken continue heavy investment south of the border. For example, AB InBev recently announced $3.6 billion of planned spending in Mexico through 2027 - funding plant modernisation, recycling and local sourcing projects. And Heineken has committed roughly €430 million to build a new brewery in Yucatán (4 m HL capacity, opening 2026) that will add over 2,000 jobs. These moves underscore how much those companies view Mexico as a growth hub, which the Teamsters argue should be curbed.

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Economic analysis: who really gains?

However, independent economists and many U.S. industry players warn that tariffs could backfire on American workers and consumers. A new analysis by economists Stephen Moore and David Ozgo finds that 74% of the economic value of each gallon of Mexican beer accrues to U.S. businesses and workers through distribution, retail, and other domestic services. Because imports like Modelo and Corona already sell at premium prices, U.S. wholesalers, retailers and bar-restaurant operators have benefited handsomely, supporting roughly 1.7 million U.S. beer-related jobs (mostly outside of brewing). Moore and Ozgo warn that tariffs would simply make beer more expensive for Americans or cut U.S. investment: “If you slap tariffs on Mexican beer, you’re not protecting American workers… you’re cutting into the most profitable segment of the beer market right now and in turn putting U.S. jobs at risk,” they say.

U.S. lawmakers have made similar points. In March 2026, a bipartisan group of over two dozen House members wrote to the USTR warning that 82-85% of beer imports are Mexican, almost all brewed with U.S. hops, barley and corn. They noted that some 80% of U.S. barley exports go into Mexican beer exports, which then return to U.S. consumers - meaning tariffs would hurt U.S. farmers as well as beer distributors and retailers built on Mexican brands. The letter stressed that tariffs would have a “multiplier effect” in the three-tier distribution system: many family-owned wholesalers and bars rely on contracts to carry specific imported brands in their regions, so higher costs could destabilize their business model.

Even major brewing industry groups oppose broad new tariffs. The Brewers Association (representing small and independent brewers) warned the USTR in July 2026 that additional import duties would raise costs across the entire supply chain. They pointed out, for instance, that many specialty malts, hops and brewing equipment are imported - and that U.S. brewers are already grappling with aluminum tariffs on cans. The Association urged “stable North American trade” (especially duty-free Mexican barley/malt) to protect jobs, noting that unpredictable tariffs ultimately hurt brewers and consumers.

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Brand and market implications

For brand owners and marketers, any brewing shift would be complicated. Beyond costs, there are issues of brand identity and legality. Moving Corona or Modelo production to U.S. soil could undermine the “import” cachet that consumers expect. As Ozgo’s report notes, when Anheuser-Busch once moved its German-made Beck’s beer to Missouri, consumers balked and lawsuits ensued over labeling it still as “German”. Heineken’s brands and Pacifico might face similar backlash if they were no longer Mexican-brewed. (In fact, Constellation Brands - which owns U.S. rights to Corona, Modelo, Pacifico - operates under a Justice Department consent order to keep those beers brewed in Mexico, making relocation legally tricky.)

Instead, brand owners have been leaning into “Made in Mexico” as a selling point. Corona, Modelo Especial and Pacifico brands have been growing faster than domestic lagers, in part by appealing to Hispanic and general consumers as premium imports. Constellation’s earnings have been buoyed by this trend, even leading it to expand a glass-making partnership in Mexico and invest in local brewing capacity. Heineken too markets Tecate, Dos Equis, Sol and others on their authentic Mexican heritage. A sudden switch to U.S. brewing would require new capital (building or repurposing breweries) and marketing to manage consumer expectations.

Key takeaways for C-suite and brand leaders

Any tariff on Mexican beer is far from guaranteed - USTR is still taking comments and plans hearings under its Section 301 investigation (see Federal Register notice). Industry stakeholders should weigh both outcomes. On one hand, bringing production onshore could create more U.S. manufacturing jobs in barley, can-making and brewing. On the other, it could disrupt supply chains and raise prices, undercutting the very workers the move is meant to help. Brands must prepare for potential consumer backlash if “Made in Mexico” beers suddenly shift location. In parallel, investing in U.S. marketing (and perhaps even local brewing capacity) might be prudent if tariffs loom. Meanwhile, continued investment in Mexico (e.g. AB InBev’s $3.6bn plan, Heineken’s new Yucatán brewery) suggests both companies are playing for long-term Mexican growth - a bet that U.S. executives will want to monitor closely.