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.

In Search of the Ultimate Freezer Martini

We asked 10 of the world's best bartenders to submit their finest recipe for the pre-batched Martini—then blind-tasted them all to find the best of the best.

It’s been nearly a year since PUNCH conducted a new edition of the long-running “ultimate” blind-tasting series. In the age of COVID-19, such close gatherings of drink judges, sipping from successive versions of the same cocktail, all prepped by a guest bartender, were strictly a non-starter.

So, with COVID Nation still very much a thing, what drink could safely bring the series back to life? The prebatched, prechilled Martini, naturally. The prefab format of the classic—which was an established trend and served in many bars before the pandemic arrived—is perfectly suited to this new at-home era.

On a recent Monday, I was joined by PUNCH editors Talia Baiocchi and Chloe Frechette and bar owners Meaghan Dorman (Raines Law Room, Dear Irving) and St. John Frizell (Fort Defiance, Gage & Tollner) via Zoom to taste through 10 batched Martinis submitted by bartenders from the United States and England. The drinks had already arrived via contactless delivery. Judges were instructed to keep the mini-bottles in the freezer until tasting time.

Though batched cocktails can be controversial—many people are attached to the ritual of a bartender making their drink on the spot, particularly when it comes to the Martini—the panel convened with no prejudices. “We’re longtime fans of freezer Martinis,” said Frechette, who added that she thought batching was the way to prepare spirit-forward recipes during quarantine. Dorman agreed that premade drinks are an ideal fit for the current times, when most folks are entertaining at home for themselves and maybe a partner or roommate. “I think you should treat yourself right now and this is the way to do it,” she said.

This particular tasting brought to the table a few new variables that wouldn’t apply in a standard sampling of Martinis. Dilution had to be addressed anew. Since the cocktails are designed to simply be pulled from the freezer and poured, they weren’t receiving their dose of softening water through the usual spin in a mixing glass filled with ice. Instead, water was added directly to the batch and had to be precisely portioned out. Too much or too little could prove disastrous. One Martini in the running didn’t make the cut because the judges thought it too strong—i.e., lacked sufficient H2O. Another suffered from a surplus of added water, rendering it weak and, well, watery.

Temperature, too, was an important factor. Martinis are expected to be cold, naturally, but these freezer-born numbers were particularly icy—a consideration the bartenders had to factor in when choosing their ingredients and honing their ratios. “Martinis in this format dull the aroma and the alcohol comes forward,” explained Baiocchi.

That issue notwithstanding, the panel was surprised by the variety of character they encountered from one glass to the next. And, as would be expected in any sampling of signature Martinis, there were some odd flights of fancy. One recipe called for both sherry and peated Scotch; another included a hefty dose of absinthe. The judges didn’t necessarily dislike either drink; they simply didn’t read as Martinis.

Finding favor was a unique specimen submitted by Orlando Franklin McCray of Brooklyn’s Nightmoves, who put together high-proof, saffron-tinged Old Raj gin, La Quintinye Extra Dry vermouth and orange bitters. The judges liked the concentration of bold flavors but thought the recipe would have benefited from higher dilution.

With the vast changes in bar regulations brought on by COVID, Frizell said that he both hopes and expects to see more prebatched cocktails on the market when the pandemic recedes and bars fully reopen.

“My hat is off to the New York State Liquor Authority for the first time in my life, for freeing up the rules so quickly,” he said. “We’re able to do so many things now that we would have lost our license for before.”

For the time being, however, he’s doing what most every other cocktail lover has been doing for the past year: shaking up his own at home. “I’ve been drinking my own Martini almost every day,” said Frizell.

NEAL BODENHEIMER'S OLD HICKORY

Mastering the Old Hickory With Neal Bodenheimer

The obscure vermouth classic gets retooled with an eye toward more flavor and less dilution.

The “raisinated vibe” and wormwood bitterness of La Quintinye Blanc forms one half of the 50/50 vermouth split.

If you’ve never heard of the Old Hickory, you’re not alone. A simple 50/50 mix of sweet and dry vermouths punched up with bitters, this low-proof classic has long existed in the shadow of the Bamboo and Adonis. Neal Bodenheimer wants to put it center stage.

Though he started workshopping the drink at his New Orleans bar Cure, he “really dug in,” as he describes the process, on the Old Hickory for Dauphine’s, a New Orleans–inspired bar and seafood restaurant slated to open this spring in Washington, D.C.. “It felt modern, and like things I wanted to drink,” he explains of the simple build. However, “it felt like a cocktail that never really got its due.”

Part of the New Orleans canon of cocktails, the Old Hickory first appeared in print in Stanley Clisby Arthur’s 1937 book, Famous New Orleans Drinks And How to Mix ’Em. Supposedly, “Old Hickory” was a nickname given to General (and later U.S. president) Andrew Jackson, a reference to his fortitude as he led troops through the Battle of New Orleans in the winter of 1814-15. Although Arthur writes that the drink was Jackson’s “favorite tipple,” Bodenheimer dismisses the claim: “I don’t think people were drinking vermouth in America in 1850.”

Though his vision for the Dauphine’s interpretation is a pre-batched version, Bodenheimer preserves elements of the cocktail-making ritual. The format coalesced at an event held at New York’s James Beard House in September 2019, intended as a preview for Dauphine’s. For the seated dinner with cocktail pairings, Bodenheimer sought out food-friendly pours, and the vermouth-forward Old Hickory seemed like a natural fit. Yet, stirred with ice, it felt too thin and watered-down. The solution was to pre-batch the vermouths and refrigerate the mixture until ready to serve. Bitters were stirred in at the last minute—“bitters expand in a batch over time, so I keep them out,” says Bodenheimer—and the mixture was then poured over a large ice cube and quickly served. The end result presented like a cocktail, but retained the texture of wine.

“We said, ‘What if we made it like an Old-Fashioned setup, and less like a vermouth cocktail?’” he recalls. “We always had our vermouth in the fridge anyway, so we always had a chilled vermouth bottle.”