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.

Seven Fifty Daily: The 9 Best World Whiskeys, According to Beverage Pros

Beverage directors and bartenders pick their favorite whiskey from lesser-known whiskey-producing countries, from a Taiwanese gold standard to a hard-to-find, small batch Spanish single malt

The map of world whiskey has been steadily expanding. In the 2024 World Whisky Awards, over 40 countries competed—twice as many as a decade ago—with entries from Sweden to South Africa. 

Investment has followed. The Diageo-backed drinks business accelerator Distill Ventures took on Australia’s Starward in 2015 and invested $10 million in Denmark’s Stauning Whisky, which launched stateside last year and is fast gaining cult recognition. 

The number of world whiskey cases sold is a fraction of what the big whiskey players produce. In the U.S. alone, 31 million nine-liter cases of American whiskey were sold in 2023; comparably, Taiwan, which produces Kavalan, arguably the leading world whiskey on the market, is home to just two distilleries. But for a contingent of whiskey aficionados, a dram from one of these lesser-known whiskey-producing regions offers an unparalleled sense of discovery—and they could be catalysts for change. 

“As more world whiskeys enter the U.S. market, they will challenge the dominance of traditional categories like bourbon and Scotch by offering distinct alternatives,” says Scott Milne, the director of marketing for Stauning. “The influx of brands signals a coming consumer shift.”

Producers utilize the unique conditions of their home country to innovate, whether that’s in the use of local grains or native wood, or working around weather conditions that are often radically different than in Scotland or Kentucky. And this in turn inspires traditional producers, says whiskey educator and consultant Tracie Franklin. “Not only do we have these unusual countries producing whiskeys that are very much attuned to their climate, agriculture, and their particular flavors, we also have these amazing whiskies that now have the freedom to be more experimental with their production process because the world whiskeys are coming out and blowing flavors through the roof.” 

SevenFifty Daily reached out to bartenders, beverage directors, and whiskey specialists to ask which bottles from lesser-known whiskey-producing countries are worth stocking up on right now. (All whiskeys are listed with suggested retail price per bottle).  

Navazos-Palazzi Malt Whisky ‘Bota Punta,’ Spain; $125

Selected by Neal Bodenheimer, owner and partner, Cure, New Orleans 

“I absolutely love the texture of this Spanish malt whisky,” says Neal Bodenheimer, the owner and partner of New Orleans cocktail bar Cure. “When you combine the texture of a delicate malt whisky with a quality oloroso sherry cask finishing from the sherry whisperers at Equipo Navazos, well, it’s absolutely peerless.” 

Navazos-Palazzi is a partnership between Jesús Barquín and Eduardo Ojeda of Spain’s Equipo Navazos—passionate bottlers of sherry wines—and Nicolas Palazzi’s PM Spirits in Brooklyn. The most recent release is the Bota Punta, a 15-year-old bottling, using casks that were bota punta—at the end of the bottom row of barrels in a solera—and therefore subjected to more air, light, and aeration. With just 900 bottles, it’s highly sought after. “Everyone on the team is super passionate about it,” says Bodenheimer. “It can be hard to get a traditional malt drinker to take a chance on a relatively pricey dram of Spanish malt. But for an exceedingly hard bottle to find it’s a really great deal.” 

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.

Seven Fifty Daily: What’s Driving the Growth of Calvados in the U.S. Market?

As Americans’ love for apples coincides with a rising appreciation for brown spirits, Calvados finds a new home in the U.S. market

Calvados is a traditional spirit dating back to 1800s France, but it’s experiencing exponential growth in the U.S. Photo Courtesy of Rogery Groulty Calvados.

In the U.S., cider is no longer enjoying the amazing growth of the past decade, but apples remain a perennial favorite among Americans. Meanwhile, the popularity of brown spirits continues unabated, expanding to embrace brandy as well. These two trends have collided to bring Calvados, France’s classic apple brandy, into more American homes and bars than ever before.

According to the Interprofession des Appellations Cidricoles (IDAC), Calvados exports to the U.S. grew 70 percent in 2021, and then repeated that feat again in 2022, making the U.S. the second largest export market for the apple brandy, after Germany. Numbers like these sometimes need to be taken with a grain of salt coming out of the topsy-turvy years of the pandemic and the global shipping crisis.

Nicolas Palazzi, the owner of PM Spirits, imports three Calvados producers, Roger Groult, Eric Bordelet, and Domaine du Tertre. According to Palazzi, importers are overstocked after bringing in extra product to protect themselves against shipping challenges, and he expects import volumes to level out. 

But Guillaume Drouin, the third-generation owner of Calvados Christian Drouin, feels the trend has legs. “Within the brandy category, apple brandy is doing very well,” says Drouin. “U.S. cider producers have started to produce apple brandy, and there are many more American apple brandies on the shelf than even just five years ago. Calvados is the historical apple brandy of the world, so hopefully it’s taking part in that trend.” 

On this point Palazzi agrees, noting that American drinkers have typically heard of the U.S. apple distillate Applejack at the very minimum. “Calvados, being the big brother of Applejack, being more complex by design, and being from a region where the name signifies something in terms of history, means it’s not as hard to sell when you already have that frame of reference.”

Indeed, the data suggests that this confluence of trends is driving a new wave of interest in Calvados among U.S. consumers and professionals alike.

From the Orchard to the Bottle

Normandy’s Calvados is one of the three classic brandies of France, alongside Cognac and Armagnac; it’s also the only one not made from grapes. The region’s history of producing apple- and pear-based spirits extends back at least five centuries, and the name Calvados came into use after the French Revolution. Production methods were formalized by the end of the nineteenth century, around the same time that Calvados rose in popularity across France, while its grape-based competitors struggled with the effects of phylloxera.

To make Calvados, apples are harvested and vinified as cider without any additions of gas, acid, or sugar, and the cider is then distilled and aged in wooden casks. A mix of apple types are permitted, but at least 70 percent must be bitter or bittersweet apples, and the rest classified as sharp or sweet; all are apple varieties that would otherwise be inedible to human palates.

Owner of Calvados Christian Drouin, Guillaume Drouin (pictured above) believes the sudden interest in Calvados spirits has staying power in the U.S. Photo courtesy of Calvados Christian Drouin.

The traditional Calvados orchard is planted with tall, high-stem trees, with fewer than 300 trees per hectare. Modern orchards are more densely planted with smaller, low-stem trees that are easy to manage and higher yielding, but are more work intensive. High-stem vineyards allow for cow pasturing and other uses among the trees. Many leading producers favor high-stem vineyards, and some use them exclusively.

Types of Calvados

Today, Calvados is made under three different appellations spread across Normandy and dipping occasionally into neighboring departments. The largest, Calvados AOC, makes up 70 percent of production, and is typically distilled in a column still; 35 percent of the apples must come from high-stem vineyards and the spirit must be aged for a minimum of two years. The Calvados Pays d’Auge is the oldest AOC, created in 1942. It’s a smaller area, has the same aging requirements, but is more stringent regarding apple sources, 45 percent of which must come from high-stem orchards. Calvados Pays d’Auge, uniquely, must also be double distilled in a pot still. While other Calvados can have substantial amounts of pears used in their production, Pays d’Auge limits pears to 30 percent of the fruit used.

In contrast, the newer, more southerly Calvados Domfrontais AOC, created in 1997, requires a minimum of 30 percent pears; the area is dominated by high-stem pear orchards. Calvados Domfrontais is produced using a column still and must age for at least three years before bottling; despite the longer aging requirements, the column still and high pear content typically yields a fresher, lighter style of Calvados.

All the Calvados appellations are open-minded regarding labeling rules, allowing age and quality statements on products that meet the given requirements. There is enough room within the regulations for producers to offer specialty products, so Calvados is able to keep up with trends found among other brown spirits. For example, Calvados can be aged in different types of vessels, such as older barrels left over from a previous generation, and bottled separately.

Christian Drouin has collaborated with distilleries such as Hine Cognac, Calle 23 Tequila, and Caroni Rum to use their barrels to finish Drouin Calvados bottlings. Drouin, Groult, and others have stepped outside the Calvados appellation to produce unaged apple brandies as well. Some producers have also introduced cask strength Calvados, bottled without being reduced back to 40 percent alcohol.

Small Producers, Small Environmental Impact

Compared to other French brandies, Calvados is well-suited to fit in with the craft ethos of America’s brandy scene, with a wide range of medium and small producers. “Calvados is still a very craft category,” says Drouin. “Even the bigger Calvados producers are very small compared to the Cognac or whiskey industry.” Calvados overall includes 8,000 hectares of orchards, making it just over a tenth the size of Cognac. Nonetheless, Calvados includes about three hundred producers, a greater number than in the more famous grape brandy region.

Drouin says Calvados’s green credentials also deserve to be better known. “We examined the carbon footprint of our company, and we calculated that every time we produce a bottle of Calvados, the equivalent of three kilos of CO2 is absorbed,” says Drouin. “So it’s probably the only spirit in the world which can show, without any effort, a negative carbon footprint.” According to the IDAC, Calvados orchards on average sequester 35 to 50 tons of carbon per hectare over a 25-year period, and the orchards also provide four times the habitat for bees and other pollinators than other field crops. 

Calvados is also seamlessly sustainable, requiring very little in the way of reducing the carbon footprint of the spirit’s production. Photo courtesy of Roger Groult Calvados.

That footprint is tied to the small volume produced per hectare—about one quarter that of grape brandy—and the biodiversity in the orchards, with cows grazing on the grass beneath the trees. In addition, the traditional, tall-tree orchards require no spraying. Workers visit the vineyards for pruning and harvesting, but little else; it’s very minimal interference compared to grain fields or vineyards, where tractors might pass through on a weekly basis. “It’s nothing new,” says Drouin. “It’s historical. We just have a protected way of production that’s sustainable.”

Calvados and American Cocktail Culture 

While the pandemic spurred more off-premise purchases of Calvados, Drouin says 70 percent of their sales go to on-premise outlets. Leanne Favre, the creative director of Leyenda and Clover Club in Brooklyn, says that as a spirits geek she enjoys Calvados neat at home, but that sales in the two bars are mostly in the form of cocktails. “It’s getting a lot more showtime in cocktails and on menus than I’ve ever seen before,” she says.

Favre adds that the wide range of styles available, from lighter, fresher examples to more aged expressions, means Calvados has a lot of different uses today, and needn’t be confined to autumnal, seasonal drinks. “It’s amazing how much range Calvados can bring to your menu when you start including it.”

More and more Calvados producers have been visiting the U.S. market and promoting their spirits, and Favre praises the Calvados industry for recent initiatives that have helped highlight the variety the category can offer. “You had forty different producers banding together; it really showed how dynamic the category can be, just like Mezcal,” she says. “It’s really worth it to try different producers and expressions.”