How potential tariffs on Mexico are already affecting restaurants — not to mention the cost of tequila and mezcal

Amá, an ambitious restaurant project helmed by chef Frankie Ramirez, is on the cusp of opening in Fishtown. The decorative pottery, custom-made by artisans in Oaxaca, has arrived, one year after being ordered. The terracotta light fixtures are hung, and the comal in the open kitchen has been installed.

The other week, Ramirez sat down to price out his menus. In the basement prep kitchen, he gestured at the growing pantry of peppers and spices, some rare, some common, but all imported from Mexico: clear plastic bins of chile casbel, which resemble enormous black cherries, papery yellow chile meco, crinkled morita chiles, and many others.

“My favorite chile is double the price,” he said, pointing at the chile cascabel bin. On March 12, a week after a 25% tariff was imposed on imports from Mexico and Canada — then quickly delayed until April 2 — Ramirez was already feeling the pinch. “I asked my guy in Brooklyn [importer Mi Barrio] for hoja santa and he said he can’t get it. They’re not bringing it in.”

» READ MORE: A South Philly produce distributor is girding for pain from Trump’s tariffs on Mexico

If the chiles Ramirez currently sources from Mexico become cost prohibitive, he is looking for other options, including persuading farmers in Lancaster to grow varieties specifically for Amá.

Most of Amá’s menu will, in fact, rely on locally grown or sourced produce and seafood, but there are certain items that are hard to find outside of Mexico.

Ramirez tried to get the Mexican scallops he was used to getting in Mexico City, which are firmer and milder than what is normally available stateside, but distributor Samuels Seafood told him it was not possible with the political situation. “We used to be able to have whatever we wanted, but now it’s scary, especially opening a new restaurant,” he said.

Stockpiling before the tariffs kick in isn’t necessarily an option for the chef, either. “I like to keep my inventories short,” Ramirez said. “From my experience as a chef, the more you buy, the more people will use. If you have a 50-pound bag of flour, people don’t care and they’ll spill it everywhere. But if you buy a five-pound bag of flour, people will watch what they use.”

Even businesses that deal in less-perishable goods that can be stockpiled, like spirits, are reeling over the potential impact of tariffs. Philadelphia-based importer Siembra Spirits started in 2005 by producing tequilas made in Mexico under its own label. In later years, it expanded its portfolio to include 48 different labels, from mezcal to Oaxacan rum to ponches (Mexican punches) from Jalisco.

“We wanted to be very diverse and not just carry our own spirits,” owner David Suro Sr. said.

» READ MORE: Tequilas founder David Suro finds inspiration in Mexican mezcal to bring back to Philly

Siembra works with numerous distributors stateside to sell its spirits to restaurants, stores, and bars in 42 states, including the recently reopened Tequilas, which is owned by Suro’s son, David Suro Jr., and daughter Elisa Suro. (Suro Sr. legally renounced his ownership when he started Siembra.)

“As many people did, we started to get inventory ready and try to bring them in before the tariffs take place,” Suro Sr. said. “But this created a nightmare at the border and has a huge impact on our cash flow. We’re bringing in more product to be prepared, but we have to subsidize that inventory.”

Suro has spent more money moving and storing product that he hasn’t yet raised prices on. But if the tariffs, currently scheduled to be implemented April 2, take place, “it’ll have a huge impact on our prices,” he said.

It’s tough for him to estimate what the immediate effect will be, but he expects that the 25% tariff will eventually be passed on to the consumer. “As soon as the tariffs were announced, this affected the prices of perishable goods,” he said. “In the case of tequila and mezcal, this is a product that depends on inventory.”

There are other consequences besides higher prices. Suro’s most recent container of agave spirits took nearly a month to travel from Mexico to his warehouse in northern New Jersey, a journey that typically takes 10 days.

“This might not have as much impact on Mexico, but more so on the U.S. and the hundreds of people who work in warehouses, the salespeople, and many thousands of people depend on these sales,” Suro said. “I feel like the punishment is on this end of the distribution chain, and not for Mexico.”

» READ MORE: How a 200% tariff on European wine would affect bars Philadelphia

Stockpiling alcohol is almost never ideal for a bar, according to Jill Weber, the owner of Sojourn Philly, the restaurant group behind Sor Inez.

On one hand, Weber is deeply concerned for the survival of the small producers of tequila and mezcal she purchases from, as “the U.S. is by far their biggest customer base.” On the other, as a restaurateur, she said, “money on-hand needs to go toward goods to be sold, payroll, rent, maintenance, and so one generally does not want to devote too much to inventory that will sit.”

Sitting on goods also creates risks restaurateurs potentially can’t afford to bear. “Disasters and break-ins happen,” Weber said.

Jared Adkins, the founder and distiller of Bluebird Distilling, said that even locally distilled alcohol is intertwined with our neighbors to both the south and north. In 2017, during the first Trump administration, which set more narrowly targeted tariffs, he saw a 25% increase in the price of his corks.

“The problem is, even though we buy from all American companies, they buy from outside of the U.S.,” said Adkins. “Our cork manufacturer is based in the U.S. but was making their corks in Mexico.”

One of Bluebird’s specialties is a Salvaji blanco agave spirit — a tequila-like product made from Mexican agave, but distilled and bottled in Pennsylvania, so it can be more easily distributed in state.

To produce the blanco agave spirit, for the last six years, Bluebird has imported agave syrup, which can be “finicky and delicate,” from Oaxaca, Adkins said. The resulting liquor “tastes like tequila with rum notes and an extra sugary note.” He also makes a reposado product aged in whiskey barrels, to give a distinctly Pennsylvanian character. In anticipation of tariffs, “we bought a lot of agave in the last two months.”

The pinch is not restricted to Mexican imports.

“Contrary to what everybody thinks, a large portion of United States grain comes from Canada,” Adkins said. “Even if you buy from mills in the U.S., a lot of their rye will come from Canada. It’s like the farms that function as co-ops. And if the prices of U.S. grain go up, the U.S. farms will charge more as well.”

Adkins once had goals of exporting his spirits, but tariffs, he said, put a lid on those ambitions.

“We were getting ready to export to Canada and Europe in 2016 and 2017, but when those tariffs hit, that all fell apart,” he said. “We saw an increase in the price of glass. Almost all U.S. companies buy their glass from Italy or China. Our glass prices have gone up almost 100% since 2015 and glass and grain are our two basic expenses.

“It’s fine if you want to bring production back to the U.S., but you can’t say that tomorrow you want everyone to go back to the factories. It would be better if there were a four- or five-year plan. Now if you tell everyone to just buy from here, it’s just going to raise prices because there’s nowhere to buy.”