Buzzkill: Trump's trade wars threaten America's craft brewers already
reeling from changing tastes
[March 31, 2025] By
DEE-ANN DURBIN and PAUL WISEMAN
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% 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
U.S. 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 $18.99 from around $12.99,
and to charge more for a pint at his tasting room.
“Are people still going to come here and pay $12 a pint instead of $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% of
its beer, found itself unable to get bottles.
“Our bottle supplier is cutting us off 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 U.S. 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 U.S. supplier — and now has 3 million cans in its
warehouse, 30% 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.
[to top of second column] |
A bartender pours a craft beer at the Liquid Love Brewing in Buffalo
Grove, Ill., Thursday, Feb. 9, 2022. (AP Photo/Nam Y. Huh, File)
 “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 U.S. craft
beer, accounting for almost 38% of exports. But Canadians are
furious that Trump targeted their products, and Canadian importers
have been cancelling orders and pulling U.S. beer off store shelves.
The tariffs come at an already difficult time for brewers.
After years of steady growth — the number of U.S. 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 U.S. craft beer
production dipped 2% to 3% 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’s production peaked in 2019 at 16,000 barrels of beer —
equivalent to 220,000 cases. Then COVID hit and hammered the
company’s draft beer business in bars and restaurants. The comeback
has been slow. Butcher expects Port City to produce 13,000 barrels
this year.
The brewery seeks to set itself apart by emphasizing its
award-winning brews. In 2015, Port City was named small brewery of
the year at the Great American Beer Festival. But it isn’t easy with
import taxes threatening to raise the cost of ingredients and
packaging.
“It’s hard enough to run a small business when your supply chain is
in intact,’’ he said. And the erratic way that Trump has rolled out
the taxes — announcing them, then suspending them, then threatening
new ones — has made it even more difficult to plan.
“The unpredictability just injects an element of chaos,’’ Butcher
said.
Aylsworth, in Arizona, said big brewers have whole teams of people
to calculate the impact of tariffs, but smaller brewers must stretch
their resources to navigate them. That's on top of the other
complexities of running a brewery, from zoning laws to licensing
permits to labor shortages.
But for many brewers, the heaviest burden right now is lower sales
as customers cut back on beer, Aylsworth said. That's why many
brewers are trying hard not to raise prices.
“In today’s world, with the economy and the high level of
uncertainty, people are spending less,” Cole said. “Beer is an
affordable luxury, and we want to make sure we don’t lose that.’’
All contents © copyright 2025 Associated Press. All rights reserved |
