Up to $1.50 of the consumer price of every canned six-pack covers the cost of aluminum. Credit: Shutterstock / Trong Nguyen

The craft beer industry, already on the ropes due to rising costs and changing consumer tastes, is bracing for a knockout punch from President Donald Trump.

Trump said he’ll announce Monday that the U.S. is slapping 25% tariffs on all steel and aluminum imports, including from Canada and Mexico. He also threatened to reveal additional reciprocal import duties later this week.

Aluminum cans are among breweries’ biggest business expenses, contributing up to $1.50 of the consumer price of a canned six-pack. What’s more, Trump’s move comes as craft-brewing businesses, including those in San Antonio, grapple with a punishing business downturn.

“Small brewers face a multitude of challenges right now, and another one in the form of aluminum tariffs would make things even more difficult for them,” said Bart Watson, chief economist of the Brewers Association, a trade association for the craft beer industry.

Production volumes for craft brewers are estimated to be 2% lower for 2024 than in the prior year, according to a midyear report by the Brewers Association. A total of 405 U.S. craft breweries closed in 2023, compared to just 72 new openings, according to association data.

Close to home, Alamo Beer Co. — San Antonio’s largest craft brewery — last week filed for Chapter 11 bankruptcy reorganization as it grappled with the trend. Meanwhile, locally owned Weathered Souls Brewing Co., Busted Sandal Brewing Co. and Second Pitch Brewing Co. all folded last year.

While some industries will respond to Trump’s tariffs by jacking up consumer prices, Watson warned that small brewers already facing headwinds don’t have that luxury.

“I think they’ll face a dilemma about whether they’re willing to pass on those costs to customers who have already been through so much inflation on the grocery aisles,” he added.

The industry’s concern is understandable.

When Trump imposed a 10% tariff on aluminum imports in 2018, the move cost nearly 40,000 jobs and led to price increases that brewers had no choice but to pass on to consumers, according to a Forbes report citing research data from the Beer Institute and National Beer Wholesalers Association.

Although Trump’s threatened trade wars with Canada and Mexico appear to be on hold — at least for now — the prospect of a reignited fight with our northern neighbor also would be bad news for small brewers.

Since much of the barley grown in the U.S. is spoken for by the beer conglomerates, craft brewers rely heavily on Canadian imports, according to Watson. What’s more, Canada is the largest export market for U.S. craft beer, meaning any reciprocation would hit hard.

“Any limitations on trade are challenging for small brewers, even though the majority of the beer they produce is sold in the local area,” Watson said.

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