Amid shaky trade talks with U.S., Quebec gin maker fears fallout for small businesses

Andre Trudeau could buy botanicals to flavour his gin from Europe and Asia, but it's far easier — and cheaper — for him to import them from south of the border.

Now, the Mirabel, Que., distiller says he is waiting to find out whether an escalating trade dispute between the United States and Canada will affect his small business — and end production of his prize-winning gin.

If tariffs are increased, "I'm going to be looking at my gin and going like ... 'I'm really glad that I won a gold medal in New York, but am I going to keep producing it at a loss?'" he said.

Trudeau is no relation to the prime minister.

Trudeau phoned into Cross Country Checkup on Sunday as host Duncan McCue asked Canadians what uncertain U.S.-Canada trade relations meant for them.

From pulp and paper, to steel and to dairy, the threat of a trade war had many callers on edge.

While Trudeau expressed concern for his own business, he worries that an increase in tariffs will hurt small businesses more generally.

Botanicals — including juniper, berries, roots and herbs — are the main ingredients that give gin its unique flavour. Trudeau said he buys his botanicals from the U.S. and worries that the U.S. will slap tariffs on these ingredients.

"The large distillers in Canada aren't going to be suddenly going, 'oh shucks, I can't get my botanicals.' They already have warehouses of that stuff," he said.

"At the end of the day you're going to have small businesses like me that are going to suffer one way or the other."

Thickened border

The concerns aren't unwarranted.

According to Meredith Lilly, Carleton University international affairs chair and former trade advisor to Prime Minister Stephen Harper, small businesses are often the hardest hit during trade disruptions.

"While we might think that large industries, like the auto sector that are highly integrated, will be badly hurt, those industries have already invested in cross-border facilitation programs," she said.

Smaller businesses, she says, don't have the same access.

The impacts on small suppliers are especially noticeable in times of border "thickening," a phenomenon that occurs when more border rules are imposed, making it less desirable to conduct international transactions.

After 9/11, security at the American border tightened significantly.

At the time, says Lilly, "American firms were more likely to just turn inward and seek local suppliers rather than continue to have a difficult supply chain operation with Canada."

"Canadian businesses will be more hurt than the United States," she said. "The reason for this is because the United States is a very big market."

'Pain is going to be felt slowly'

Indeed, it's a big market that Trudeau wants to tap into, but with uncertainty at the border, suppliers are hesitant to make deals.

"I had folks lined up for possible exporting of gin to the United States, but they got cold feet," he said in a follow-up email. "They're presently having a bit of a wait-and-see attitude to the 'trade war.'"

Trudeau is already considering ways he can diversify his product lineup. Whiskey can be produced with grains from Quebec, while molasses for rum can be brought in from Nova Scotia, he says.

As July 1 — when retaliatory tariffs are scheduled to take effect — approaches, entrepreneurs wait to find out if more goods will be affected. 

Until then, Trudeau is looking to others for help.

"I'm not a negotiator, I make darn good booze," he said.

"I just hope that somebody who has more of knowledge of economics than I do is able to figure this one out."