In December, the Zaidi race importer in San Francisco made an order for a gynebrae palette, spirits and bitter from a producer of Mexican spirits.
While the truck was heading north to the border several weeks later, it was against the clock: on February 1, President Trump had announced plans to impose 25% tariffs On imports from Mexico and Canada.
These taxes entered into force on March 4: the day the 1,000 -bottles of Zaidi arrived at the port of entrance to Laredo, Texas. But in an investment two days later, Trump said he would temporarily lift tariffs to many Mexican and Canadian products for a month.
He fast It caused confusion at the border crossing, said Zaidi, since the customs authorities discovered how to evaluate the shipments that had come during the brief window of time that the tariffs were in their place.
“They didn't know how much we had to pay,” said Zaidi, the owner of Back Alley Imports. “The conclusion was that it took 10 days trapped at the border and I was left without certain products. It is a complete chain of events that is due to this crazy uncertainty. And that is not even considering whether prices should increase.”
Zaidi expected the pause of a month to mean that he would leave it. But because tariffs are collected in the Customs Authorization TimeUltimately, it was beaten with $ 2,000 in additional taxes, one of the many business owners trapped in the crossfire of an intensification of a global commercial war.
Zaidi paid $ 2,000 in additional taxes this month because its shipment arrived from Mexico on March 4, the day of 25% of tariffs.
(Peter Dasilva / for the times)
The industries and products of all kinds are being subsumed by the recent flood of rates ads, which cover a wide range of goods and also involve disputes with China and the European Union.
But those who work in the alcoholic beverage market in California and throughout the country say they are especially vulnerable, with the perspective of steep duties that threaten to boost an industry that already faces an existential calculation.
In addition to the tariffs of 25% of Mexican and Canadian imports, the alcohol industry is in the center of a dispute with the EU, which this month proposed a 50% duty in the American whiskey. In response, Trump said he would place a 200% rate On wine, champagne and liquor of the EU.
“From a maximum of 2022 until now, the market has hired for all kinds of reasons,” said Jill Bernheimer, owner of Melrose Avenue Wine Shop Domaine la. “Is one thing after another. This will not help at all. “
The last blow
After decreasing 2.6% in 2023, the Volumes of total US drinks. UU. He continued to fall In the first seven months of 2024, according to the IWSR global drinking firm.
The volumes fell 2.8% from January to July, the group said. All the main categories, except alcoholic beverages ready to drink, were reduced, with the wine decreasing by 4%, beer falling 3.5%and the spirits fell 3%.
“In all areas, these decreases are a bit worse than what was forecast,” said Marten Lodewijks, president of the IWSR United States Division, when the data was published in September. “The slight recovery that was expected has not materialized.”
Americans are drinking less wine and other alcoholic beverages.
(Haven Daley / Associated Press)
Americans are consuming less alcohol due to a myriad of reasons, including an uncertain macroeconomic landscape and persistent inflation concerns that have decreased spending. But much of the change has been cultural.
An impulse towards moderation has led to an increase in the popularity of low and without alcohol drinks, especially among younger consumers. Some people have replaced at least part of their alcohol consumption with cannabis. The industry has been unexpectedly injured by the Ozempic boom, and users report that weight loss drugs have stopped their alcohol cravings. And drinking has been the goal of health concerns: in January, the United States General Surgeon asked cancer warning labels be placed in alcoholic beverages.
The industry has resisted the tariff tumult before, even during the first Trump administration. But things were different, said Bernheimer.
“It was easier for all levels of the three -level system planning and responding because it was a much more solid time in the alcohol industry,” he said, referring to the different segments of producers, distributors and retailers. “It is definitely thinner now. I don't have the resources that I had to store a warehouse full of wine to cross me.”
Trying to plan in advance
As things are, April 2 is the planned date for 25% tariffs on Mexican and Canadian imports to return.
With those deadlines that are coming, many companies have been on front of the orders to try to obtain as many products as possible in US land and maritime entrance ports quickly. Doing it would prevent retail prices from increasing too much and would avoid breaks in the supply chain.
We are a program of totally Mexican spirits, so this is a fairly serious situation for us.
– Max Reis, beverage director at the Los Feliz Mira yourself restaurant
Some importers are bringing up to nine months of inventory of agave spirits in Mexico to prepare for the possibility of prolonged tariffs, said Susan Coss, co -founder and director of mezcalists, a media firm, event and consulting focused on the mezcal in Alameda, California.
“The will, they will not, it is putting so much improper stress to the people and the companies,” Coss said. “Everyone is struggling to have a plan A, Plan B, Plan C in terms of a price strategy.”
The storage is not financial or logistically feasible in Mirarate, a Mexican restaurant and bar in the happy ones, said co -owner Matt Egan.
Look at the happy.
(Joel Barhamand / for the Times)
Like most restaurants in Los Angeles, Mirate operates on thin razors and was already having greater costs in all areas due to inflation, as well as the persistent effects of the strikes of Pandemia and Hollywood. It is based on solid sales of alcoholic beverages, which have significantly higher profit margins than food, and derive 40% of their revenues on the drink side.
“We are a program of totally Mexican spirits, so this is a rather serious situation for us,” said Max Reis, director of Mirarate drinks.
“There are no real American substitutes for a tequila or a mezcal,” Egan added. “If this happens, I think it will significantly shake the industry.”
They said the pain will feel at all levels, from alcohol producers to customers.
Look presents a totally Mexican drink program.
(Matt Egan)
“There is no way that we can accommodate that 25%,” said Egan, and said that tariffs would also affect the costs of viewing food; It imports fish, avocados and citrus of Mexico. “This is a scenario in which we are going to have to have to pass that cost to the consumer, and that is not something we want to do. But that is the only option for us.”
'Collateral damage'
A 25% tariff is quite bad, but a 200% retaliation tax over the entire alcohol imported from the EU would be “absolutely devastating,” said Robert Tobiassen, president of National Assn. of beverage importers.
“There would be business closures and the like,” he said, “and then there is the dominated effect on the economy because you have port workers, truck drivers, workers, all involved in the importer distribution system to the distributor to the retailer.”
On the other hand, American distiller say they will suffer if the EU continues their plan to impose a 50% rate on the American whiskey.
For years, the spirits industry was the “model for fair and reciprocal trade,” said Chris Swonger, president of the United States Destained Spirits Council. From 1997 to 2018, when the United States and the EU had zero tariffs for zero in the spirits, transatlantic trade in the industry almost 450% shotsaid.
“The EU wrapped us in a Teta by eye rate,” he said about the current commercial dispute. “We need the president's help to unravel the spirits industry and the largest hotel industry, of these tariffs. We are collateral damage.”
In Sonoma Distilling Co., a small lot batch whiskey distillery founded in 2010, approximately one third of income comes from orders aimed at Europe, said founder and teacher distiller Adam Spiegel.
Adam Spiegel in Sonoma Distilling Co. in Rohner Park, California, Monday.
(Peter Dasilva / for the times)
If the tariff on the American whiskey is imposed next month, Spiegel worries that its European importers can delay their reuse rate, leaving it with lower sales and an excess of inventory.
“We will be in a very precarious position,” he said. “Try to forecast with this level of uncertainty is very difficult. How can I predict how much production do and how much packaging? Do I buy 10,000 labels or buy 50,000 labels?”
When the EU imposed a 25% rate on the American whiskey in 2018, Spiegel said he chose to receive a blow to the company's profit margins instead of risking business loss abroad. He doesn't think he can do the same this time.
“Potentially, it is a 50% rate versus a 25% rate as before, that could be a number that I cannot absorb,” he said. “It is a situation of mutual destruction for all.”
