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 The second full week in May is American Craft Beer
Week. This frothy celebration has been happening since 2006 as a national week
to celebrate “independent brewers and small breweries around the country.” This
year, however, small brewers don’t have much reason to celebrate because the
American craft beer industry has been burdened by Trump-era tariffs on aluminum,
which have ultimately harmed small businesses and consumers, while not
protecting American assets.
In 2018, then-President Donald Trump used Section 232 of the Trade Expansion Act
of 1962 “to impose a 10 percent tariff on aluminum imports.” Trump imposed the
tariffs after a “review by the Commerce Department that concluded imports …
posed a national security risk.” While certain countries were originally
excluded, Trump would impose the tax on aluminum imports from all countries
until the U.S. eventually reached deals with the European Union, Canada and
Mexico as a pre-condition to remove the tariffs.
Not only did the tariffs lead to retaliatory actions by other countries, they
have pushed the cost of goods up for manufacturers and consumers – and this is
no more apparent than in America’s craft beer industry.
American craft beer companies have been disproportionately impacted by aluminum
tariffs as cans “make up around 60 percent of independent craft packaged
volume.” In response to Trump’s initial tariff announcement, the Beer Institute
(BI),“condemned” the tariffs and noted that they would “unnecessarily increase
costs on American businesses and put jobs at risk.”
Moreover, aluminum producers have taken advantage of the tariffs and have
imposed them on even domestic aluminum products. In an independent third-party
analysis of the impacts of the tariffs one year after they had gone into effect,
BI found that U.S. aluminum smelters and rolling mills had charged “end-users a
tariff-paid price as if the entire product … consisted of imported primary
aluminum.” BI reported they had heard from brewers across America that had seen
“their aluminum costs drastically increase, even when they are using American
aluminum.”
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Coupled with tariffs, craft brewers in America are also facing supply chain
issues and a shortage of aluminum. In March, 2022, small craft brewers in
Minnesota reported that they were “struggling to find cans,” with one noting
they had seen a 27 percent price increase for cans.
And even more damning, the tariffs have cost the craft beverage industry
billions of dollars. In April, BI published research examining the four years of
tariffs, finding that “the U.S. beverage industry alone has paid $1.4 billion in
tariffs” and those costs were undoubtedly pushed to consumers.
There also have been rumblings that beer prices will go up due to other factors
than aluminum prices and shortages. In February, large beer maker Heineken
warned that the price of beer would increase as the manufacturer was facing
“crazy increases” in production costs.
Overall, the aluminum tariffs have been disastrous policy that are
disproportionately affecting consumers. Amid an inflation pandemic that is
costing the average American family an extra $341 a month, tariffs on aluminum
increase that burden. An analysis of the overall aluminum tariffs found that in
2021, the tariffs impacted “over $350 billion of imports and exports and
increase consumer costs by roughly $51 billion annually.”
Tariffs on aluminum products have severely impacted the American craft brewers.
Like many other small businesses, many craft brewers turned from making beer to
hand sanitizer during the COVID-19 pandemic. And, like many other customer
service-type businesses, brewers were disproportionately impacted by lockdowns
and mitigation efforts.
It’s long overdue to reverse terrible tariff trade policy and American Craft
Beer Week is the perfect time to start rectifying this problem.
Lindsey Stroud is director of The Taxpayers Protection Alliance’s
Consumer Center.
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