If you’ve followed my work, you know that I’m no fan of tariffs.
I think it’s important, though, not to exaggerate their effects.
In “Trump’s Tariffs To Tank Tequila,” Reason, January 28, 2025, Eric Boehm writes:
That’s because President Donald Trump’s threatened tariffs on imports from Mexico will increase prices and could reduce the availability of some tequilas and mezcals, says Gabe Sanchez, owner of the Black Swan Saloon, a legendary cocktail bar in Dallas.
“It’s going to be a very difficult conversation for us to have with people when they come in,” Sanchez told Reason in an interview last week. While his customers might be used to $15 cocktails, Sanchez says tariffs could potentially push menu prices “much higher.” (Sanchez’ favorite drink right now is called “True Romance,” and he was gracious enough to share the recipe, which you can find at the end of this article.)
Elsewhere in the article, Boehm writes:
One of Sanchez’s to-go varieties of mezcal is available from a distributor at $35 per liter right now, he says. If the full cost of a 25 percent tariff gets passed down the supply chain, menu prices will have to increase, or certain drinks will have to disappear.
“If that jumps to $42 [per liter], we can’t make it. We can’t put those in cocktails anymore,” Sanchez explains. To stay competitive with other bars in the area, he knows he can’t price cocktails much higher than about $15 apiece. “If it jumps at that high, we just can’t sell it anymore. You know, somebody is not going to buy a $20 or $22 plus tax mezcal cocktail.”
If the whole tariff were passed on, the price would actually jump from $35 to $43.75. So he underestimated a little but not much.
What would that $8.75 increase translate into per cocktail? At the end of the article, Boehm gives Sanchez’s recipe. It uses 1.5 ounces. There are 33 ounces in a liter. So a bartender who doesn’t waste many drops can get 22 cocktails out of 1 liter. That works out to $8.75 divided by 22 per cocktail, which is 40 cents per cocktail. So the bar could pass on the whole increased cost due to the tariff by pricing the drink at $15.40. It’s hard to believe he would raise the price to $20, let alone $22.
Certainly, a 3% increase in the price of a cocktail would cause some drinkers to balk. But very many?
