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.

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.

BRANDY - From Cognac to California, the historic spirit’s influence runs deep.

JUICY FRUIT

From vineyard or orchard to bottle and bar, brandy’s influence runs deep.

Cognac, Armagnac, applejack, schnapps—in whichever form brandy is found, these spirits made from fruit have no parallel in the glass. While whisk(e)y, tequila, and rum get lots of love these days (deservedly so) from cocktail lovers and spirits drinkers, brandy is evolving and emerging on its own terms, slowly building a fan base to take this timeless spirit into the future.

We’re taking a closer look at today’s world of brandy—the ways it’s made and appreciated around the world, the details behind its complex production, and the reasons it should be the next bottle you reach for when cocktail hour rolls around.

Nicolas Palazzi

Bordeaux-born and Brooklyn based, Palazzi is the importer behind PM Spirits, specializing in independent spirits such as L’Encantada Armagnac, Cognac Frapin, and Cobrafire eau-de-vie de raisin.

“Something that’s really cool is when you’re in a brandy cellar, with 50, 60, 100 casks in front of you; even if they’re from the same batch of distillation, every cask is its own world. You could taste 15 casks distilled the same day, and you’ll find tremendous differences between them—whereas something like bourbon would be very consistent. There’s so much aroma and flavor profile available in brandy. If someone thinks Cognac is just one thing and it’s boring or they don’t like it, I assure you, I can find a single-cask Cognac that’ll blow your socks off. It’s a world that deserves to be discovered, for sure.”

Commanders and Cocktails!

Welcome to COMMANDERS AND COCKTAILS!

Some folks know that before I was able to work full time in comics, I worked in a variety of jobs in the wine and spirits field. And the final one of those was for my good friend Nicolas Palazzi’s PM Spirits. Just COMMANDER IN CRISIS, PM works its ass off to be unique, to create trends rather than follow them, and offer craftsmanship and creativity in a field that has, at times, been known to stagnate. I wouldn’t be where I am, writing this, without the support of friends and employers like Nicolas.

So, I thought it would be fun to turn the tables and feature him and his crew below, offering some in-universe cocktail recipes to honor the heroes of the Crisis Command. In the paraphrased words of a greater power, when I left PM I was but the learner. Now, I am the master (well, or closer to it)! And either way, I’m happy to return the support with a feature here, and invite creatives from other fields into the world of the Crisis Command.

STEVE ORLANDO

Commanders in Crisis, Vol. 2

PRIZEFIGHTER

2oz Navazos Palazzi Malt or Corn Whisky
0.75oz La Quintinye Rouge Vermouth
0.5oz cherry liqueur
2 dashes Angostura Bitters
Barspoon Absinthe

Instructions:

Build in rocks glass over ice and stir briefly. Garnish with burnt blood orange peel.

SEER

2.5oz Neta Espadin Destilado de Agave
0.5oz La Quintinye Dry
Barspoon of olive brine
Pinch of salt

Instructions:

Build in mixing glass over ice and stir until cold. Strain into chilled cocktail glass and garnish with 3 green olives on a pick.

SAWBONES

2oz Père Labat Rhum Blanc 59%abv
4 dashes Peychaud’s Bitters
Sparkling mineral water

Instructions:

Pour Rhum into highball glass over ice. Stir briefly to chill. Top with sparkling water and bitters. Stir once again to combine. Serve without garnish. or Neat pour of Jacky Navarre Cravache d’Or Cognac

ORIGINATOR

1oz Nouaison Gin by G’Vine
0.75oz lemon juice
0.5oz Laurent Cazottes Folle Noire
0.5oz simple syrup
2oz sparkling wine

Instructions:

Build all ingredients except sparkling wine in a shaker and shake lightly to combine. Add sparkling wine to the shaker and strain into chilled cocktail glass. Garnish with a spring of fresh lavender.

FRONTIER

2oz Père Labat Rhum Blanc 40% or 59% abv - Choose your strength
0.5oz Laurent Cazottes 72 Tomatoes

Instructions:

Build in mixing glass over ice and stir until cold. Strain into chilled cocktail glass and garnish with freshly ground black pepper.

COCKTAIL CREDITS: David Yi-Hsian Dong and Nicolas Palazzi of PM Spirits.

Let’s Talk About “Smooth”

It may be the most ubiquitous descriptor in drinks. Is it also the most reviled?

The Bordeaux-bred, Brooklyn-based spirits importer Nicolas Palazzi traffics in stories—of the alchemists along the river Charente, whose Cognacs capture the essence of the surrounding vineyards and microbiota; of the artisans in northwestern France, whose Calvados express the nuance of dozens of cider apple varieties via a single bottle. Palazzi’s company, PM Spirits, identifies itself as a “provider of geeky spirits.” Part of the job, indeed, involves geeking out, luxuriating in the details and conveying them to potential buyers. It’s an arrangement that hinges on dialogue, governed by the imprecise linguistics of wine and spirits. Descriptors and analogs form bridges to connect one’s palate and sensibility to another’s. But all it takes is one word to dissolve the connection entirely.

“If their reaction is, ‘Oh, that’s smooth,’ it just tells me that I probably have not identified my customer as well as I thought I had,” Palazzi tells me. “I’m not upset at the person saying ‘smooth.’ I’m upset at the waste of life—it’s basically a sign that says ‘You just wasted your time.’”

Harsh words for a word that literally signifies the opposite. But language matters. The lingua franca of booze is inherently nebulous, and it requires calibration. A trained nose and palate can instantaneously identify a range of aromas and flavors and free-associate memories and feelings, which all become pinpoints tracing a constellation, giving shape to a ghost. The term “smooth” effectively erases any point of reference. Even as an adjective, “smooth” functions as a verb: It is the buffing out of character, the sanding down of the distinctions that make great spirits great. In the quest to triangulate the specific qualities of a spirit, “smooth” instead forms a binary of acceptability. It is a value judgment on whether or not one finds the spirit drinkable, one that can easily be impressed upon an unwitting consumer. This is exactly why the term is so ubiquitous in the marketplace, and—for decades, if not centuries—a red flag among connoisseurs.

Geeky Cocktails: Meet the Man Behind the Artisanal Spirits Movement

 

 

Geeky Cocktails: Meet the Man Behind the Artisanal Spirits Movement

When Nicolas Palazzi quit his day job as a chemical engineer in 2008, the spirits world got a little more interesting. The French native had moved to New York City to manage a medical research lab, but brought with him a curiously intense affinity for rare-cask Cognac. Dismayed by the lack of like-minded, handcrafted products on the market in the U.S.—where the spirits scene was still largely focused on big-name brands despite a booming, more intelligent cocktail culture—he set out to learn the business from the ground up. He officially launched his import company, PM Spirits, in early 2011 with just two independent Cognac producers (Paul Beau, Guillon-Painturaud) and six products. Now his book includes profound Spanish brandies, grappa from famed Sicilian avant-gardiste Frank Cornelissen, and Mexican Fernet (a bitter liqueur).

Palazzi is being lauded by beverage authorities nationwide as the go-to for distillates of character and terroir, and Palazzi’s unique bottles now line the shelves of restaurant and bar greats like The NoMad in New York City, Jack Rose Dining Saloon in Washington, D.C., and Scopa Italian Roots in Venice, California. Had an interesting digestif you’d never heard of before while out dining? That might have been made possible through Palazzi’s meticulous sourcing. He talks to Vogue.com about cocktails, “geeky” spirits, and the six bottles he’s most excited about now.

The tagline on your website is “provider of geeky spirits.” What does “geeky” mean in the spirits world?

When it comes to spirits in general, one doesn’t buy a product, one buys a brand. They buy the marketing and the status that the label conveys, but they don’t have a gauge on the true quality of the stuff inside the bottle, how it was made, who made it, and why it tastes the way it does. So by “geeky,” we mean the other stuff. It’s made by real people. It has an actual flavor profile that is specific to the place in which it’s made and the ingredients it’s made from. It’s not sweetened to death, artificially colored, or made to be as innocuous as it can be.

From that perspective, it seems to be as much about supporting the little guy as it is about supplying cool products.

It absolutely is. We want them to keep doing what they’re doing. When you start working with somebody, and they’re distilling out of a shack or their house is run-down, and you come back a year and a half later and see that they’ve made improvements. . . I’m not saying it’s 100 percent because of what we’ve done, but there is something rewarding about working with real people and the fact that the money spent buying these products can go toward their living and the creative process as opposed to feeding some giant company. I have nothing against big companies, but that makes it more meaningful to me. And the other result is that we’re educating people; we’re getting the authentic stuff to the people who will care about it. We’re showing them what these spirits used to taste like before mass marketing existed and can still taste like today.

What is a typical reaction of someone tasting spirits in your portfolio who is more used to tasting name-brand products?

People are not sure what to expect. A lot of people start out thinking that they’re doing us a favor by tasting these products that they’ve never heard of before, but they end up realizing that there’s a world of difference. I had one buyer who thought he didn’t like Cognac, then after one taste of the Paul Beau VS, he lit up. He was all, “Oh, wow, that’s really interesting,” and, “That’s a set of aromas and flavors I’ve never experienced before.”

There’s something extra that happens in the brain with the sensory experience of taste. When you taste something new and you love it, there’s an emotional connection that takes place. At that point, the person is not likely to forget it. They know you’re not fooling around and will want to see what else you have in your bag, even if it’s not something that will appeal to their particular clientele. They know you’re not wasting their time.

Would you say that the movement toward artisanal spirits is picking up speed, like what we saw happen to the craft-beer category?

It has definitely changed over the last six or seven years. Before, nobody cared, really. If you take bourbon as an example, you used to be able find anything you’d want and more on the shelves for a lot less money because people just didn’t know about it. And now certain bourbons are unavailable and allocated. Spirits are becoming cool. Drinkers have started paying more attention to what they’re drinking. I think that’s good news for everyone involved.

What is the coolest cocktail that you’ve encountered made with one of your spirits?

In Texas, I saw a sidecar made with a single-cask Cognac from a producer named Gourry [de Chadeville] that I brought in last year. This Cognac is distilled in a wood-fired pot still and is 64.3 percent alcohol, so that is a pretty kick-ass sidecar. You can’t drink too many of them! And at Cane & Table in New Orleans, they’re making a daiquiri with a rum I sourced in Spain from the sherry producer Equipo Navazos. It’s a bold daiquiri and is totally delicious.

What’s the latest addition to your portfolio that you’re most excited about? The thing that we don’t know about yet but will?

Calvados! I was lucky enough to be introduced to Eric Bordelet, the cider-maker in Normandy. It turns out the guy has been distilling for a number of years but never released anything. He’s doing single-cask full-proof unfiltered Calvados, distilling from both his cidre and his poiré (pear cider). Plus, his mentor was Didier Dagueneau, the famed Pouilly-Fumé winemaker, so everything is aged in ex-Silex casks from Dagueneau. It’s incredibly cool and will be available stateside in the beginning of 2016.

Intrigued? Here are six unique bottles Palazzi recommends adding to your bar (or gifting a very good friend):

Navazos-Palazzi Double Barreled Cask Strength Spanish Rum
A 100 percent molasses-based rum from the Antilles. Dark, meaty, with a nuttiness derived from the Oloroso sherry cask it ages in for more than ten years. Finishes bone dry. Only 1,500 bottles produced per year.

H. Beudin Single Cask 18 Year Calvados
Calvados with a kick, bottled at full proof. Gives a sense of what the pure stuff tastes like when sampled from a cask. Selected by star cider-maker Eric Bordelet.

Gourry de Chadeville Grande Champagne Cognac
One-man operation led by Pierre Goursat Gourry on nearly 25 acres of vineyards in Grande Champagne. A young, bold Cognac reminiscent of ripe apple and smoke, it spends seven years in an ex-first growth Sauternes cask.

Domaine d'Aurensan 1975 Single Cask Armagnac-Ténarèze
Like a vintage-dated Armagnac on steroids, with zero sugar, zero water, and zero coloring added. Distilled by the Rozès family. Mature flavors of dried prune, leather, and earth, with a seemingly endless finish.

Laurent Cazottes Poire Williams Eau-de-Vie
Distilled from organic pears dried to concentrate their flavor and then the pits, seeds, and stalks removed. Only 200 half-bottles of this Poire Williams come in to the U.S. each year.

Frank Cornelissen MunJebel Rosso Grappa
What happens when Sicily's most emblematic natural winemaker makes grappa. Distilled in a wood-fired vapor still from volcanic Mt. Etna’s indigenous Nerello Mascalese grapes.