The trade war already had the American toy industry freaked out and now, a result of the Trump administration’s tariff on foreign metals, American beer drinkers may want to think carefully before buying their next six-pack of canned booze.
The tariffs, 25% on steel and 10% on aluminum, were placed on American trading partners Canada, Mexico, and the European Union as a measure to protect the interests of American producers. So far, it’s put American brewers and beer importers in a difficult position.
In the past few years, aluminum has become an increasingly bigger part of the American beer industry. When small breweries get started, they tend to rely on cans to package their beer. And those cans are made of aluminum. So, the more breweries there are, the more reliance there is on aluminum suppliers. And as American suppliers have to pay more for imported aluminum as a result of the tariffs, those costs translate to higher prices for brewers. And how do they cover those costs? By charging beer drinkers more.
Octopi Brewing, a craft brewery in Wisconsin, is currently living this. After the tariffs were announced, Octopi’s aluminum supplier raised their prices by 15 percent.
“It’s terrible, it’s hitting our bottom line,” Octopi Brewing CEO Isaac Showaki told CBC in an interview. To make up for the hike in aluminum, cans of Octopi beer could cost customers 50 cents to $1 extra, Showaki explained.
Speaking to the idea that the tariffs were put in place to help American businesses the Wisconsin based CEO remarked, “I don’t know if there’s a ploy to shelter domestic manufacturing and lessen competition from abroad, but what’s happening is it’s just increasing prices — on a lot of things.”
It’s not just the cost of products directly related to the tariffed material that are affected. Breweries like Octopi rely on fruit concentrate to flavor their beers and, at least in the case of Octopi, suppliers of concentrate said they would no longer deliver directly to them because of potential “border issues due to NAFTA negotiations and political arm-twisting from your side and our side.”
With tariffs making canned beer cost more, sticking to glass bottles may be the move.