Trump’s trade wars threaten America’s craft brewers already reeling from changing tastes

Washington: America’s craft brewers already have enough problems. Hard seltzers and cocktails are muscling into beer sales. Millennials and Gen Z don’t drink as much as their elders.

Brewpubs still haven’t fully recovered from the shock of COVID-19 five years ago.

Now there’s a new threat: President Donald Trump’s tariffs, including levies of 25 per cent on imported steel and aluminum and on goods from Canada and Mexico.

“It’s going to cost the industry a substantial amount of money,” said Matt Cole, brewmaster at Ohio-based Fat Head’s Brewery. Trump’ trade war “will be crippling for our industry if this carries out into months and years.”

The tariffs, some of which have been suspended until April 2, could impact brewers in ways big and small, said Bart Watson, president and CEO of the Brewers Association, the trade group for craft beer.

Aluminum cans are in Trump’s crosshairs. And nearly all the steel kegs used by US brewers are made in Germany, so a tariff on finished steel products raises the cost of kegs. Tariffs on Canadian products like barley and malt would also increase costs. And some brewers depend on raspberries and other fruit from Mexico, Watson said.

At Port City Brewing in Alexandria, Virginia, founder Bill Butcher worries that he’ll have to raise the price of a six-pack of his best-selling Optimal Wit and other brews to USD 18.99 from around USD 12.99, and to charge more for a pint at his tasting room.

“Are people still going to come here and pay USD 12 a pint instead of USD 8?’’ he said. “Our business will slow down.’’

For Port City, the biggest threat comes from the looming tariff on Canadian imports. Every three weeks, the brewery receives a 40,000-pound truckload of pilsner malt from Canada, which goes into a 55,000-pound silo on the brewery’s grounds. Butcher said he can’t find malt of comparable quality anywhere else.

Trump’s tariffs also hit Port City in a round-about way: The levy on aluminum, which went into effect March 12, is causing big brewers to switch from aluminum cans to bottles. Port City, which bottles 70 per cent of its beer, found itself unable to get bottles.

“Our bottle supplier is cutting us of at the end of the month,’’ Butcher said. “That caught us by surprise.’’

Fat Head’s Brewery gets its barley from Canada. Cole said it could shift to sources in Idaho and Montana, but the shipping logistics are more complicated. And Trump’s tariffs, by putting Canadian barley at a competitive disadvantage, would allow US producers to raise domestic prices.

Fat Head’s is trying to mitigate the impact of the tariffs. Anticipating higher aluminum prices, for instance, the brewery stockpiled beer cans — which it gets from a US supplier — and now has 3 million cans in its warehouse, 30 per cent of what it needs annually. It has also shifted production to painted cans, which are cheaper than those with shrink-wrapped film sleeves.

In Arizona, some brewers are already eliminating or reducing the beers they offer in aluminum cans to cut costs, said Cale Aylsworth, the director of sales and relations at O.H.S.O. Brewery and Distillery and president of the Arizona Craft Brewers Guild.

“This is a blow to Arizona craft. I hate to see less local options on the shelf,” Aylsworth said.

Some brewers have also lost access to store shelves from one big customer: Canada, which is the top foreign market for US craft beer, accounting for almost 38 per cent of exports. But Canadians are furious that Trump targeted their products, and Canadian importers have been cancelling orders and pulling US beer off store shelves.

The tariffs come at an already difficult time for brewers. After years of steady growth — the number of US breweries more than doubled to 9,736 between 2014 and 2024 — the industry is struggling to compete with seltzers and other beverages and to win over younger customers.

In 2024, brewery closings outnumbered openings for the first time since the mid-2000s, Watson of the Brewers Association said. He estimates that US craft beer production dipped 2 per cent to 3 per cent last year.

“Craft brewing had a period of phenomenal growth, but we are not in that era anymore,” he said. “We’re in a more mature market.”

Port City Brewery, which peaked at 16,000 barrels in 2019, expects to produce 13,000 this year. Recovery has been slow post-COVID, with rising costs and import taxes adding pressure. Brewers struggle with uncertainty, tariffs, and lower sales as consumers cut back on spending.