Trump tariffs bring more questions and fears for businesses

Navigating Trade Tensions: A Small Business Owner’s Outlook

The rumble of the trade war is a constant source of anxiety for many business owners. President Trump’s promises of imposing tariffs on goods from key trading partners haven’t simply faded into the background; they’ve become a harsh reality. The impact is being felt across the board, with a 25% tax now imposed on shipments from Mexico and Canada, and existing tariffs on Chinese goods increasing by 10%.

This latest escalation leaves entrepreneurs scrambling for answers,unsure if thes measures are just temporary hiccups or a harbinger of a lasting shift in the global trade landscape. Nicolas palazzi, founder of Brooklyn-based PM Spirits, a company specializing in importing and selling wine and spirits, expresses this sentiment perfectly: “Is it for a day? Is it a political flex, or is it something that will last for four years?”

PM Spirits, a 21-person company, relies heavily on international sourcing. Roughly 20% of their inventory comes from Mexico, making them particularly vulnerable to these new trade barriers. Palazzi’s concern echoes a sentiment shared by countless business owners throughout the country. The unpredictability surrounding these tariffs adds another layer of complexity to already challenging business decisions. Navigating fluctuating market conditions, supply chain disruptions, and rising costs is a daunting task, especially for smaller companies with limited resources.

Planned tariffs on imports from Canada, Mexico, and China have sent shockwaves through the North American business community. These actions, targeting key trading partners responsible for over 40% of US imports, threaten to disrupt established supply chains and impact a wide range of industries.

While Canadian oil and energy resources will face a lower 10% tariff, most other goods will be subject to a blanket 25% tariff.The White House maintains that these measures are intended to pressure Canada and Mexico into taking action on concerns related to illegal immigration and drug trafficking. “This is about holding our trading partners accountable for their promises,” stated President Trump.

Tariffs Threaten Tequila Trade, Raising Fears Across North America

A brewing trade dispute between the US and Mexico, ignited by impending tariffs on Mexican-made alcohol, is sending ripples of anxiety through businesses across North America. Small importers, distilleries, and consumers alike are bracing for impact, fearing price hikes, dwindling choices, and potentially devastating economic consequences.

President Trump’s decision to impose a 25% tariff on imported tequila, mezcal, and rum from Mexico has sparked widespread concern. Dan Kelly, president of the Canadian Federation of Independent Businesses, describes the situation as “existential” for many members, emphasizing the potential for crippling economic fallout.
“Look, we get that the government has got to respond in some fashion,” Kelly said, “But at the same time, we urge the government to use caution. It poisons your own people to try and fight the disease.” His comparison of tariffs to chemotherapy highlights the potential for unintended harm.

The impact of these tariffs could extend far beyond Mexico’s borders, potentially pushing Canada’s economy towards recession, according to economists. Sophie Avernin,director of De Grandes Viñedos de Francia in Mexico,points out that American consumers have developed a strong affinity for Mexican spirits. She notes that Modelo beer, a popular brand, is actually owned by a Belgian company, illustrating the interconnectedness of the global beverage industry.
“It’s going to have an effect everywhere,” Avernin warned.

While President Trump dismisses concerns about collateral damage, viewing tariffs as a powerful tool to address various issues beyond trade, critics warn that these measures will stifle growth, inflate prices, and contribute to job losses. According to estimates by the Tax Foundation, the tariffs could cost the US economy approximately 286,000 jobs, excluding retaliatory measures.

Small businesses, already struggling to recover from the pandemic’s economic fallout, including inflation, face an insurmountable hurdle with these tariffs. Ben Scott, owner of California-based importer Pueblo de Sabor, which specializes in Mexican brands like Mal Bien and Lalocura, expresses his frustration:
“I’m pretty frustrated…There’s just a huge cost that…”

Bad‌ Hombre Importing

Fred Sanchez poured years of his life into building Bad Hombre Importing, a California-based company specializing in the import and distribution of sought-after Mexican agave spirits. just as he was poised for a major expansion, securing deals in New York and Illinois, a shadow fell over his dreams. president Trump’s escalating rhetoric on tariffs sent a chill through Sanchez’s meticulously constructed plans. potential partners, understandably wary of the impending financial uncertainty, began to back away.Now, Sanchez faces a stark reality. His dream is teetering on the brink of collapse. The prospect of absorbing a 25% tariff, or passing that cost onto already price-sensitive consumers, feels insurmountable.

“25% is just not something that we can realistically pass onto the consumer,” Sanchez confided, his voice heavy with the weight of his predicament.

While a glimmer of hope remains that Trump might eventually drop the tariffs in a strategic move, the damage for Sanchez’s business is already done.

Tequila Tariffs: A Toast to Uncertainty

The brewing trade war between the US and Mexico has cast a long shadow over the spirits industry, particularly for importers specializing in agave-based spirits. Fred Sanchez, owner of Bad Hombre Importing in California, finds himself at the heart of this storm, facing an uncertain future due to the looming 25% tariff on Mexican alcohol.

Sanchez, a seasoned importer with a deep passion for Mexican spirits, shared his perspective on the potential repercussions of these tariffs and their impact on his business.

An Importer Caught in the Crossfire

“Potential partners have become hesitant, frankly,” Sanchez reveals. “They’re worried about price fluctuations and the potential impact on their bottom line. Many are now waiting things out,stalling even promising deals. The uncertainty itself is the most damaging factor, creating a standstill in what was once a very vibrant and promising market,” he states.

The looming tariffs threaten to cripple Sanchez’s business. “Honestly, the 25% tariff is a crippling blow. It’s simply not something we can realistically pass on to the consumer. Raising prices in the current economic climate would be detrimental. It’s possible we’d have to liquidate our stock and shutter our operation. It’s a painful reality, especially when you’ve poured your heart and soul into building a business you’re passionate about,” he admits.

A Glimmer of Hope Amidst the Uncertainty

While the situation is dire,Sanchez clings to a sliver of hope. “I’m clinging to that hope,” he says.“there’s always a possibility that negotiations could lead to a resolution or that public outcry could influence the decision. But realistically speaking, the situation feels dire at the moment. the lack of concrete action and clear communication from either side fuels the anxiety and uncertainty.”

What specific actions could policymakers take too mitigate teh negative impact of tariffs on small businesses like Bad Hombre Importing, which import Mexican agave spirits?

Tequila Tariffs: A Toast to uncertainty

The brewing trade war between the US and Mexico has cast a long shadow over the spirits industry, particularly for importers specializing in agave-based spirits. Fred Sanchez, owner of Bad Hombre Importing in California, finds himself at the heart of this storm, facing an uncertain future due to the looming 25% tariff on Mexican alcohol.

Sanchez, a seasoned importer with a deep passion for Mexican spirits, shared his viewpoint on the potential repercussions of these tariffs and their impact on his buisness.

An Interview with Fred Sanchez, Owner of Bad Hombre Importing

Q: Fred, your company specializes in importing Mexican agave spirits. How are these potential tariffs impacting your business?

A: Honestly, it’s devastating. Potential partners have become hesitant, frankly. They’re worried about price fluctuations and the potential impact on their bottom line. Many are now waiting things out, stalling even promising deals. The uncertainty itself is the most damaging factor, creating a standstill in what was once a very vibrant and promising market.

Q: What are the biggest challenges you foresee if these tariffs are implemented?

A: The 25% tariff is a crippling blow. It’s simply not something we can realistically pass on to the consumer. Raising prices in the current economic climate would be detrimental. It’s possible we’d have to liquidate our stock and shutter our operation. It’s a painful reality, especially when you’ve poured your heart and soul into building a business you’re passionate about.

Q: What are your hopes for the future?

A: I’m clinging to that hope. There’s always a possibility that negotiations could lead to a resolution or that public outcry could influence the decision. But realistically speaking, the situation feels dire at the moment. the lack of concrete action and clear interaction from either side fuels the anxiety and uncertainty.

Q: What message would you like to send to policymakers regarding these tariffs?

A: I urge them to carefully consider the unintended consequences of these tariffs. Small businesses like mine are caught in the crossfire,and the potential damage to our livelihoods,and the broader economy,is immense. We need solutions, not punitive measures that harm businesses and consumers alike.