President Trump has announced plans to double the tariffs on aluminum and steel from 25% to 50%, effective this Wednesday, June 4. These increases will likely be taken under Section 232 of the Trade Expansion Act, which authorizes the president to impose tariffs for national security reasons. As such, the pending legal cases involving the president’s authority to impose tariffs in the case of emergencies will not affect these tariffs.

Aluminum tariffs hit brewers particularly hard due to the reliance on aluminum cans to package most beer (approximately 76% of all U.S. packaged beer comes in cans). While small brewers typically source cans domestically from domestically rolled can sheet, a portion of the raw aluminum used to make U.S. can sheet is imported, mostly from Canada. Aluminum prices (as established by the “Midwest Premium”) already have increased since the president’s announcement of increasing the tariff on aluminum.

Steel tariffs also will increase the price of supplies relied on by America’s small and independent brewers. Most steel kegs used in the U.S. are sourced from European Union countries. Brewing equipment and components of brewing equipment are often made in China or the European Union. While the Brewers Association would welcome more domestic production of steel kegs and brewing equipment, developing the domestic manufacturing capability for such items will take time.

Of course, the president might delay or roll back the planned aluminum and steel increase, as he has with several other recent tariffs. Brewers should work with their suppliers to assess and mitigate the impact of these increased tariffs on their businesses. The Brewers Association will continue monitoring the situation and bring you the latest news as it develops.