LONDON, March 14 (Reuters) - Spirits giant Diageo ( DEO )

has suggested the U.S. government consider tougher rules

of origin requirements in trade agreements as an alternative to

tariffs, a letter to the U.S. Trade Representative showed.

In the March 11 letter, Diageo ( DEO ), the world's top spirits

maker caught in the crossfire of U.S. President Donald Trump's

effort to remake global trade, argued that new rules of origin

could support his aims and benefit the industry.

Such rules could give preference to goods, including

alcoholic drinks, in which all ingredients and subcomponents are

substantially sourced within the U.S. or via its key trading

partners, Alden Schacher, vice president of government relations

at Diageo North America wrote.

This would deepen U.S. supply chains, prevent "foreign

adversaries" from using U.S. trade partners to circumvent

tariffs and support the administration's policy objectives such

as growing the U.S. economy, said the letter, one of hundreds

published by the USTR from firms and trade associations about

tariffs.

Diageo's ( DEO ) proposed rules of origin would require that plants

or grains used in the production of imported alcohol come from

the United States or the territory of a strategic trade partner

- any country that has a trade agreement with the U.S., such as

Mexico and Canada.

The company also suggested that the rules ensure the

distillation also occurs in the U.S. or the territory of the

same partner, with any barrels used in ageing also sourced from

one of those places.

Diageo ( DEO ) sells billions of dollars worth of tequila and

Canadian whisky in the United States. Executives have warned

Trump's threatened 25% tariffs on Mexico and Canada could deal a

$200 million hit to operating profit in the company's second

half alone, before mitigation measures.

Trump on Thursday also threatened to slap a 200% tariff on

wine, cognac and other alcohol imports from Europe.

In the letter, Schacher wrote that trade in distilled

spirits is largely reciprocal and therefore actions to address

imbalances are not necessary.

Schacher pointed out that Diageo ( DEO ) employs thousands of U.S.

workers, has 11 U.S. manufacturing sites, and spends $650

million every year on U.S. inputs including barrels, glass and

cans.