The Impact of Tariffs on Craft Breweries: A Community in Crisis

Craft Breweries as Cornerstones of Community

Craft breweries are more than just places where beer is made; they serve as vital community hubs, often referred to as a "third place" where people gather outside of home and work. These local businesses are frequently run by passionate individuals who are deeply rooted in their neighborhoods. For example, Caleb Hiliadis, head brewer at Amherst Brewing Company in Massachusetts, shared his perspective on the challenges facing small breweries. "It’s honestly been a tough couple of years for the small craft brewer in America," he said, highlighting the difficulties of navigating a post-pandemic world where reliance on aluminum cans has become crucial for survival.

The Double Blow: Tariffs and Economic Challenges

Despite their local roots, craft breweries are not immune to broader economic policies, such as President Donald Trump’s newly announced tariffs on steel and aluminum imports. These tariffs, set at 25%, are expected to drive up the costs of essential materials used in brewing, packaging, and serving beer. This comes at a particularly vulnerable time for the industry. The craft beer sector, once thriving, has been hit hard in recent years by the pandemic, which decimated taproom sales and forced breweries to rely more on cans and bottles. Global supply chain disruptions further exacerbated the problem, leading to shortages and price hikes for key inputs like aluminum cans. Additionally, shifting consumer preferences toward non-beer beverages have added another layer of pressure. In 2024, for the first time in nearly two decades, more craft breweries closed than opened, underscoring the severity of the crisis.

The Rising Cost of Brewing: Aluminum and Steel Tariffs

The impact of the tariffs is particularly significant for craft breweries, as aluminum cans have become a cornerstone of their operations. According to data from the Brewers Association, a trade organization representing small and independent brewers, beer in aluminum cans accounted for approximately 75% of craft breweries’ packaged volume and revenue in early 2025. Many of these cans are imported from Canada, which, along with Mexico, supplies nearly 40% of the steel and aluminum imported by the U.S. The tariffs are expected to increase global aluminum prices and directly affect U.S. manufacturers of steel products, including kegs, tanks, and building materials used in breweries.

A Cautionary Tale: Lessons from 2018 Tariffs

Proponents of tariffs argue that they could boost domestic manufacturing and encourage companies to buy locally. However, the 2018 tariffs on steel and aluminum offer a cautionary tale. Research by the Federal Reserve and the International Trade Commission found that these tariffs led to increased prices for both materials, despite exemptions for Canadian aluminum. Jason Klein, co-founder of Spiteful Brewing in Chicago, experienced this firsthand. "Last time, we were hit with a 3% increase in pricing for cans, and that was when we bought American," he said. "That was the opposite of what was supposed to happen. It seems like no matter who you buy from, the prices are probably going to go up."

Bracing for the Worst: Smaller Breweries Hit Hardest

The new tariffs, which went into effect on March 12, are expected to raise producer prices for steel and aluminum by 15% to 20% in the coming months. While economists predict that the market will eventually adjust, a lasting 10% rise in steel prices and 15% rise in aluminum could cost consumers an extra $8 billion annually. For craft breweries, the impact will be felt acutely. Klein, whose brewery sources cans from Canada, is bracing for a significant increase in costs. "Buying American is challenging for us; we tried that, but we were too small to buy from the big American manufacturer," he said. "So we get pushed to brokers who pool their resources together, and currently, our cans come from Canada. They’re gonna get hit with a price increase, and then that’s going to get passed on to us."

The Future of Craft Brewing: A Threat to Small Businesses

The tariffs pose a existential threat to small, independent craft breweries, which operate on razor-thin margins. Katie Stinchon, executive director of the Massachusetts Brewers Guild, noted that canned beer accounts for more than 60% of packaged beer sales for guild members, with Canada being a major supplier of aluminum. "While all breweries will feel the impact, our smallest breweries will be hit the hardest," she said. "They don’t have the capital or storage space to buy aluminum in bulk at lower prices, and they already operate on thin margins. Meanwhile, they’re competing against multinational beer corporations that can absorb these cost increases." Hiliadis echoed this sentiment, stating that many breweries are "already at a tipping point" where they can no longer pass further cost increases on to consumers.

The tariffs also threaten the very essence of what makes craft breweries special: their role as community spaces. Hiliadis warned that rising costs for steel and aluminum could stagnate the growth of independent breweries, making it harder for small owner-operators to open new businesses. "You’re not going to see that if the cost of these commodities continues to go up," he said. As the industry struggles to navigate this uncertain landscape, one thing is clear: the impact of these tariffs will be felt far beyond the bre