Issue of 20% tariff on Mexican goods blew up big time late afternoon yesterday when it was floated by White House Press Secretary Sean Spicer. “We can do $10 billion a year and easily pay for the wall just through that mechanism alone,” he said. But hours later, he walked back the proposal as just one of the “options” under consideration. Still, couldn’t have been good for Constellation folks to see headlines like the NY Post’s frontpager this morning: “Corona to Pay for the Wall.”
Constellation Brands Beer Division “is caught in a whipsaw between Trump, conservatives in Congress and now the border wall politics,” said a source. But it’s already apparent that idea of taxing Mexican goods will meet lotsa resistance, even from Republicans, as Wash Post showed. Three Republican Senators objected right away. “Simply put, any policy proposal which drives up costs of Corona, tequila, or margaritas is a big time bad idea,” SC’s Lindsey Graham tweeted. Earlier he said: “Border security yes, tariffs no.” Senator Sasse (NE) said: “Tariffs are a tax on American families.” And Senator McCain said he’s “deeply concerned.” Even #2 Repub in Senate, John Cornyn of TX, tweeted: “Many unanswered questions about proposed ‘border adjustment’ tax.” Since Repub Senate majority slim at 52, these early hints at skepticism or even resistance matter in terms of how politics play out, INSIGHTS hears. In fact, “oddly enough,” said source, “this was a good day” for Constellation. Constellation clearly ain’t sitting still, hiring several DC lobbying firms, including prominent Democratic lobbyist Heather Podesta + Partners, which has A-list of corporate clients, including Toyota, Pepsi, Red Bull, Home Depot for starters. But now that idea of border tax out in open, “rushed out in order to retaliate,” wrote Post, it will take some time to figure out if that’s even what Trump administration pushes for, let alone if it can pass.