BBC: 'Is it for a day or four years?' Tariff uncertainty spooks small businesses

Donald Trump's talk of applying new tariffs to goods from America's biggest trade partners has sparked months of uncertainty for business owners.

On Saturday, the president made good on his threats, ordering a new 25% tax on shipments from Mexico and Canada and raising existing tariffs on goods from China by 10%.

But that has not stopped the questions.

"Is it for a day, is it a political flex or is it something that will last for four years?" asked Nicolas Palazzi, the founder of Brooklyn-based PM Spirits. He runs a 21-person business that imports and sells wine and spirits, about 20% of which come from Mexico.

Trump's orders set in motion threats that the president has discussed for months, striking at shipments from America's top three trade partners, which together account for more than 40% of the roughly $3tn goods the US imports each year.

Canadian oil and other "energy resources" will face a lower 10% rate. But otherwise, there will be no exceptions, the White House said.

Trump said the tariffs were intended to hold Canada and Mexico accountable for promises to address illegal immigration and drug trafficking.

The measures go into effect on 4 February and are to remain in place "until the crisis is alleviated," according to the orders.

If the plans were not a surprise, they still presented a potentially stunning blow to many businesses, especially for those in North America. The three countries have become tightly linked economically after decades of free trade under a treaty signed in the 1990s, known then as Nafta and updated and renamed under the Trump administration to USMCA.

The growth of mezcal in the US, brought in by businesses like Palazzi's, has been part of this shift.

Since 2003, consumption of tequila and mezcal has roughly tripled, increasing at a rate of more than 7% each year, according to Distilled Spirits Council, a trade group.

Overall since the 1990s, trade in spirits between the US and Mexico has surged by more than 4,000% percent, said the organisation, which issued a statement after the president's announcement warning that the tariffs would "significantly harm all three countries".

For months, Palazzi has been fielding nervous questions from his suppliers in Mexico, who are typically small, family owned businesses and may not survive if the tariffs are prolonged.

If it sticks, he said the 25% tax on the bottles of mezcal, tequila and rum he brings in will push up prices - and sales will drop.

"Definitely this is going to impact the business negatively. But can you really plan? No," he said. "Our strategy is roll-with-the-punches, wait and see and adapt to whatever craziness is going to unfold."

Economists say the hit from the tariffs could push the economies of Mexico and Canada into recession.

Ahead of the announcement, Dan Kelly, president of the Canadian Federation of Independent Businesses, described the looming tariffs from the US, and expected retaliation, as "existential" for many of his members.

"Look, we get that the government has got to respond in some fashion …. But at the same time we urge the government to use caution," he said, comparing tariffs on imports to chemotherapy: "It poisons your own people in order to try and fight the disease."

"It's going to have an effect everywhere," said Sophie Avernin, director of De Grandes Viñedos de Francia in Mexico, noting that many Americans own Mexican alcohol brands and Modelo beer is actually owned by a Belgian company.

Trump, who has embraced tariffs as a tool to address issues far removed from trade, has dismissed concerns about any collateral damage to the economy in the US.

But analysts have warned the measures will weigh on growth, raise prices and cost the economy jobs - roughly 286,000, according to estimates by the Tax Foundation, not including retaliation.

Those in the alcohol business said the industry had already been struggling to emerge from the shadow of the pandemic and its after-shocks, including inflation, which has prompted many Americans to cut back on dining out and drinking.

Smaller firms, who typically have less financial cushion and ability to swallow a sudden 25% jump in cost, will bear the brunt of the disruption.

"I'm pretty frustrated," said California-based importer Ben Scott, whose nine-person business Pueblo de Sabor brings in brands from Mexico such as Mal Bien and Lalocura.

"There's just a huge cost that's going to affect so many people in ways other than they're paying a couple bucks more for a cocktail, which doesn't sound like a tragedy."

Fred Sanchez has spent years pushing to expand his business, Bad Hombre Importing, a small California-based importer and distributor of Mexican agave-based spirits like Agua del Sol, and was recently working on deals in New York and Illinois.

But his potential partners started hesitating as Trump's tariff talk ramped up last year.

Now, instead of expanding, he is contemplating selling off his stock of liquor and possibly shutting down. He said he had little capacity to absorb the jump in costs and saw little scope for raising prices in the current economy.

"25% is just not something that we can realistically pass onto the consumer," he said.

Sanchez said he believed that Trump might be using tariffs as a negotiating tactic, and the tax could be short-lived. Still, for his business, damage is already done.

Financial Times: Make mine a Stinger… why cognac cocktails are trending

Forget the Spicy Margarita – here’s what the mixologists will be ordering at the bar

The Spicy Margarita is everywhere – in plenty of bars I know it now accounts for half of all drinks sales. But what would we all be drinking if the bar world’s top tastemakers had their way? In my survey, brandy won by a landslide, with cognac, Armagnac and apple-based calvados all getting plenty of votes. “Cognac is the king of spirits, it’s got so much going on,” says Jake Burger, proprietor of Portobello Star in London’s Notting Hill. He recommends the 19th-century Cognac Cocktail – essentially an Old Fashioned made with brandy – “which is what we’d all be drinking today if phylloxera hadn’t wiped out all the French vineyards and turned America into a whiskey-drinking culture”. For a really authentic Cognac Cocktail, he says, use Sazerac de Forge & Fils cognac, which is modelled on pre-phylloxera recipes (£121, masterofmalt.com). Under the £80 mark he also likes Merlet XO, Fanny Fougerat Iris Poivré XO and Prunier VSOP. Armagnac comes highly recommended by Sipsmith co-founder and master distiller Jared Brown and Sebastian Tollius, beverage director of Eleven Madison Park’s new Clemente Bar. “It’s rustic, full of character and versatile,” says Tollius. He favours the small batch bottlings by French specialist PM Spirits (from $62.50, pmspirits.com). “Perfect [as a sub for whiskey] in classics like Manhattans or as a stand-in for cognac in a Vieux Carré.” Ennismore’s head of bars Robert Simpson makes the case for calvados, “which has flavours from crisp fresh fruit through to apple strudel”. Punch editor Talia Baiocchi agrees: “I love a simple calvados and tonic.”

PM Spirits VS Overproof VS Bas Armagnac, $62.50 for 75cl, pmspirits.com

Liqueurs were another strong performer – and particularly crème de menthe. Which would have shocked me had I not, uncharacteristically, found myself ordering a Stinger in the Spy Bar at Raffles London just recently. This minty digestif sees cognac laced with white mint liqueur; it’s typically shaken and served “up” in a coupe or over crushed ice. Spy Bar makes its own After Eight-infused crème de menthe, but Tempus Fugit (£31.50 for 70cl, bbr.com) is also excellent. Another liqueur due a revival, according to drinks writer and co-owner of the Pacific Standard in Portland, Oregon, Jeffrey Morgenthaler, is the monastic nightcap Bénédictine DOM (£31.25, thewhiskyexchange.com) – he favours the “sweet, peppery, herbal French liqueur” in a rye whiskey-based La Louisiane cocktail. NoMad London’s Leo Robitschek, meanwhile, pleads the case for amaretto, particularly in a sour. If there’s a common theme in all of this, it’s the after-dinner drink. Perhaps 2025 will see the red-hot Margarita make way for something a bit more smouldering. 

Stinger

Some might find this old-school 3:1 formula a bit heavy on the crème de menthe. If in doubt, start with less and then work your way up.  60ml VSOP cognac or armagnac 20ml white crème de menthe (such as Tempus Fugit) Method: Shake with ice and then either strain into a cocktail glass, sans ice, or serve over crushed ice in a rocks glass. 

Los Angeles Times: A mecca for mezcal: These are the best agave bars in L.A.

“You’ve got to put a bottle of mezcal on the ofrenda,” says Ivan Vasquez, owner of Madre Oaxacan Restaurant & Mezcaleria, with four locations across L.A. County and the largest small-batch mezcal collection in the U.S. “For me, and back in the villages, a bottle of mezcal has to be there.

“On Día de los Muertos, you drink a copita with your loved ones,” Vasquez instructs. “It’s the only spirit that keeps our loved ones alive. When I drink mezcal on Día de los Muertos, I’m reunited with my grandpa. Thanks to him, I was introduced to mezcal.”

While tequila has had a couple centuries to gain an international following, the rise of mezcal and regional spirits like sotol and bacanora is more recent. It was only in the ‘90s that mezcal gained Denomination of Origin (DO) status, which restricts legal and commercial use of the word, and paved the way for it to be sold across the globe.

The spirit, which imparts earthy tasting notes, exploded in popularity over the pandemic, partially because of the heritage involved — mezcal producers, or mezcaleros and mezcaleras, often utilize methods that have been honed across generations and are unique to their family or village. The final product, Vasquez says, delivers a flavor that can be more layered and complex than wine.

Also known as maguey, the spiky agave plant has been revered by Indigenous Mexicans for millenniums, providing food, practical items such as rope and sandals and fermented beverages like pulque. When Spanish colonizers arrived with the still, agave wine was distilled into spirits like tequila, made exclusively from agave tequilana, and mezcal, which can be made from over 40 other agave types.

“Los Angeles is like the mecca right now for agave distillates,” said Rocío Flores, a mezcalera who grew up splitting time between L.A. and Jalisco and now hosts agave tastings and educational experiences, including the program at Guerrilla Tacos. “It’s probably the one place in the world where you can find the most diverse, the most amazing mezcals that you can’t even find in Mexico in one place all together.”

The global appreciation for Mexico’s ancestral spirits has influenced the tequila industry too. For his part, Vasquez only works with small producers and serves tequila blanco exclusively — no reposados or añejos. When customers ask for corporate brands like Casamigos, he and his staff use it as an opportunity to educate.

“I tell them, ‘Let me bring you several options that are higher proof at a lower price’ and I ask them to enjoy it neat,” he says. “They’re just amazed when they try it.”

L.A. was already a great place to drink agave distillates, but these days the options are overflowing. Included on the list below are agave-focused bars that prioritize stocking small-batch producers and offer flights that encourage imbibers to sip in the traditional style. Some, like Vasquez, even sell rare bottles out of their bars. Whether you’re toasting in celebration or stocking up to savor with your ancestors on Día de los Muertos, these are the best agave bars in Los Angeles.