On May 20, 2019, the United States government officially lifted the steel and aluminum tariffs on Canada and Mexico as an incentive for Congress to pass the United States Canada and Mexico Act (USMCA). The tariffs, which were a result of the 232 Investigation by the Department of Commerce were in place since March of 2018.
The Brewers Association, who urged the lifting of tariffs on Canada and Mexico during their recent hill climb, viewed this as a positive step forward.
“Thanks to the federal excise tax recalibration we have seen a surge of breweries reinvesting in their businesses by expanding their facilities or purchasing new equipment,” said Bob Pease, president and CEO, Brewers Association. “Both breweries and the companies they source their equipment from need access to steel and aluminum for construction, brewhouses, tanks, and packaging. We hope that the tariffs being lifted on Canada and Mexico will help with availability and affordability.”
According to Bart Watson, Brewers Association’s chief economist, small brewers are trending towards using cans as a packaging method. Cans have risen from only 16 percent of small brewer packaged production in 2014 to 41 percent in 2018. Independent breweries who package with cans had reported increases in lead times and prices of cans, as well as reduced availability over the past year.
Though 98 percent of can sheet, the material used to make aluminum cans, is produced in the United State, 66 percent of primary aluminum, one of the main materials used in producing can sheet aluminum, is imported from Canada.
The Brewers Association is continuing to monitor all tariffs that have an impact on the brewing industry. If you have any questions, please contact Brewers Association Federal Affairs Manager Katie Marisic.