Steel and aluminum tariffs could raise the price of canned beer, South Carolina brewers warn

CHARLESTON, S.C. (WCBD) — Local brewers are warning that consumers could soon pay more for a six-pack of beer due to steep tariffs on foreign steel and aluminum announced by the Trump administration this week.

President Trump announced Monday that the U.S. would impose a 25% tariff on all steel and aluminum imports “without exceptions or exemptions,” reinstating the 2018 steel tariff he implemented during his first administration and raising the aluminum rate from its previous 10%.

Tariffs are taxes charged on goods imported from other countries. They are paid for by companies bringing in the goods initially, though economists say these costs are usually passed down to the consumer via higher prices.

“There’s some circumstances where maybe the seller lowers the price a little bit to compensate for the tax, but generally what we see empirically is that most of the value of that import tax, of that tariff, gets passed along to the consumer who’s buying the good,” said Dr. William Hauk, an associate economics professor at the University of South Carolina.

Small businesses, including local breweries, are already bracing for the impact.

Chris Ranere, the owner and head brewer at Indigo Reef Brewing Co. in Charleston, said he has been in ongoing discussions with his suppliers since the announcement was made.

“The first thing I always do any time tariffs come up is talk to my suppliers, and luckily in the craft beer world, we do have a lot of suppliers that are very transparent and kind of stay ahead of things,” said Ranere, who also serves on the board of the South Carolina Brewers Guild which represents more than 60 independent craft brewers statewide.

“For these steel and aluminum tariffs, the biggest impact we think it’s going to have to the brewing industry is cans,” added Ranere, who also serves on the board of the South Carolina Brewers Guild which represents more than 60 independent craft brewers statewide.

The U.S. imports more aluminum from Canada than any other country, according to the Brewers Association, which noted that the use of aluminum cans is steadily growing as a packaging method.

As the demand for canned products rose during the COVID-19 pandemic, Ranere said more manufacturing facilities began to pop up, not only in the U.S. but also in Mexico and Canada.

And while some places like Indigo Reef get their actual cans from domestic manufacturers, the bulk of the raw materials come from overseas. Trade data shows that South Carolina imported $144 million in aluminum and aluminum articles just from Canada in 2023.

“Over half of the raw aluminum actually comes from Canada, and so I call that out just because my biggest reaction is we’re going to be seeing impacts down the line,” Ranere said. “It’s not just going to be the fact that cans are coming across the border and being taxed at a tariff rate of 25%, it’s going to be a lot of the raw ingredient to manufacture those cans and lids.”

The tariffs could have a direct impact on the industry’s ability to get steel products, potentially raising the costs of items critical to brewing like kegs. The U.S. imports about a quarter of its steel from other countries, according to the International Trade Association.

As production costs go up, consumer prices are likely to follow.

“I think that the biggest thing is going to be our package beer, so our six packs, and we’ve already kind of been looking at that,” Ranere said. “As soon as we do see some of the impacts from our suppliers, we will likely have to raise our pricing as well.”

This could have damaging consequences for an already struggling industry, he warned.

“There’s so many breweries right now that are on the line and are waking up every day hoping that consumers are going to come into their taprooms and drink beer because, you know, we’re just not seeing the numbers of craft beer drinkers that we used to, and part of that is because of how expensive everything is,” Ranere said.

“I think there’s a lot of breweries out there that you know aren’t going to be able to weather the storm,” he added.

Trump has defended his decision to impose extensive tariffs on several of the country’s top trading partners, suggesting that “some pain” may be necessary in order to spur domestic manufacturing.

“This will be the Golden Age of America!” Trump wrote in a Feb. 2 post on Truth Social. “Will there be some pain? Yes, maybe (and maybe not!). But we will make America great again, and it will all be worth the price that must be paid. We are a country that is now being run with common sense — and the results will be spectacular!!!”

Canadian Prime Minister Justin Trudeau on Tuesday called the steel and aluminum tariff “unacceptable,” saying his country is prepared to respond if needed.

“Imports of Canadian aluminum and steel create thousands if not millions of jobs and support families across the United States,” Trudeau said at the AI Summit in Paris. “We have been doing things together in an extraordinary and integrated way for many many years and we will look to continue to work with our closest ally and partner. We should be doing more together, not fighting with each other. But Canadians will stand up strongly and firmly if we need to.”

Ranere mentioned the uncertainty still surrounding Trump’s tariff plan, and he and other independent brewers are watching closely to see how it unfolds.

“At this point, everybody’s a little bit skeptical but planning for the future and ramping up their inventories right now,” he said.