‘Is this for one or four years?’ Tariff uncertainty touches small businesses

The talk of Donald Trump’s implementation of new tariffs to goods from America’s largest business partners has given rise to uncertainty of months for business owners.

On Saturday, the President performed well on his threats, ordered 25% tax on shipments from Mexico and Canada and increased the existing tariff on goods from China to 10%.

But it has not stopped the questions.

“Is it for a day, is it a political flake or is it something that will last for four years?” Asked Nicholas Palazi, the founder of Brooklyn -based PM Spirits. He runs a 21-person business that imports and sells alcohol and souls, about 20% of which comes from Mexico.

Trump’s orders are threatened in speed that the President has discussed for months, striking on shipment from the top three business partners in the US, which imports together for more than 40% of the goods of about $ 3TN simultaneously. .

Canadian oil and other “energy resources” will face low 10% rate. But otherwise, there will be no exception, the White House said.

Trump said the purpose of the tariff was held to Canada and Mexico for the promises of illegal immigration and drug trafficking.

According to the orders, the measures apply on February 4 and remain “until the crisis reduces the crisis”.

If the plans were not surprised, they still presented a possible amazing blow to many businesses, especially for those in North America. Under a treaty signed in the 1990s, the three countries have been tightly connected after the free trade of decades, known as NAFTA and the USMCA was updated and named under the Trump administration.

The growth of mazesal in the US brought by businesses like Palazi has been part of this change.

Since 2003, the consumption of Tequila and Mezal has been almost three times, which is growing at a rate of more than 7% each year, according to a trade group Distilled Spirits Council.

Overall after the 1990s, trade in souls between the US and Mexico has increased by more than 4,000%, the organization said, which after the President’s announcement issued a statement that Tariff “will cause great damage to all three countries. “.

For months, Palazi has been fielding questions nervous with its suppliers in Mexico, which are usually small, family -owned businesses and can not survive if tariffs are long.

If it sticks, he says that he brings 25% tax on mezcal, tequila and rum bottles that increase prices – and sales will decrease.

“Surely it’s going to affect the business negatively. But can you really plan? No,” he said. “Our strategy is roll-world, wait and see and whatever is going to be favorable for insanity.”

Economists say that tariffs can push the economies of Hit Mexico and Canada into recession.

Prior to the announcement, Dan Kelly, president of the Canadian Federation of Independent Business, described the Lump Tariff from the US, and the expected vengeance, as “existence” for many of his members.

“Look, we feel that the government has received some fashion to answer … but at the same time we urge the government to be careful,” he said, comparing the tariff on imports for chemotherapy: “It poisons your people. Try and fight the disease.”

Sophie Everin, director of D Grands Viandos de Francia in Mexico, said, “It is an impact everywhere, given that many Americans’ Mexican alcohol brands and Modlo Beer are actually owned by a Belgian company.

Trump, who has adopted tariffs as a tool to address issues over business, has dismissed concerns about any collateral damage to the economy in the US.

But analysts warned that the weight of measures will grow, prices will increase and the cost of economy will cost – about 286,000, according to the tax foundation estimates, not including vengeance.

In the alcohol business, those people said that the industry was already struggling to emerge from the shade of epidemic including inflation and the subsequent huts, which have inspired many Americans to eat food and drink back.

Small firms, usually low financial cushions and the ability to suddenly swallow a jump of 25%, will bear the brunt of disintegration.

“I am very disappointed,” said California-based importing Ben Scott, whose nine-person businesses bring goods from Pubelo de subor Mexico to brands such as Bien and Llokura.

“Just a large cost that is affecting so many people in other ways to affect, as they are paying a couple for a cocktail, which does not seem like a tragedy.”

Fred Sanchez established a small California-based importer of Mexican agave-based souls in 2014, and established their business, Bad Homebreen Importing and recently working on deals to expand their sales to New York and Illinois. Was doing.

But his potential companions were hesitant as Trump’s tariff talk increased last year.

Now, instead of expanding, he is considering selling his stock of alcohol and possibly closing. He says that he has very little ability to absorb the leap in cost and sees very little scope to increase prices in the current economy.

“25% is not just anything we can actually pass on the consumer,” he said.

Sanchez said that he believes that Trump Tariffs can be used as a conversation strategy, and tax may be short -lived. Nevertheless, for their business, the damage has already been done.