Bitter Brew: Northwest Craft Beer Industry Feeling Bite From Metals Tariffs

Jul 27, 2018

The craft brewing industry in the Pacific Northwest is starting to feel pain from the Trump administration's steel and aluminum tariffs. Those metals are made into beer cans, kegs and fermentation tanks.

Owen Lingley runs Craft Canning + Bottling, a mobile canning service that caters to small brewers in Oregon, Washington and Colorado. He said aluminum can suppliers quickly raised prices to match the 10 percent tariff on imports.

"It's just stupid,” Lingley said. β€œIt's artificially raising prices for everybody for no reason."

Speaking from Portland on Friday, Lingley said everyone in the distribution chain down to consumers will take a hit.

"We're taking a lower margin and it's being passed on to clients as well,” he said.

The beer and wine industry in the Northwest also feels pain from the 25 percent tariff on steel. That has translated into big price increases for stainless steel fermentation tanks which the booming sector is buying as it grows.

Lingley said the majority of the raw aluminum for beer cans comes from Canada.

"Canada is not a national security threat," Lingley said. "Self-inflicted wounds are just stupid. The U.S. can't produce enough aluminum. It cannot do it. So we source most of it from an ally."

In an interview on NPR Friday morning, President Donald Trump's top trade advisor Peter Navarro said the administration's economic policies are succeeding.

"The president has been in favor of fair trade and using tariffs in order to get to that point," Navarro said. "There's a high cost to artificially low, cheap prices when countries cheat. And when they cheat, they try to steal our jobs."

A national lobbying group for the craft brewing industry, the Brewers Association, opposes the tariffs and is working to get exemptions where it can.

"The market uncertainty and financial penalties created by these tariffs negatively affect a growing manufacturing sector of the American economy," Brewers Association President Bob Pease said in a statement. "We urge this Administration to reconsider these tariffs, as they place an unnecessary burden on small, Main Street business owners who are creating thousands of jobs and pouring money back into their local economies."

Leading Republicans in Congress, including Washington Reps. Cathy McMorris Rodgers and Dave Reichert, have also voiced displeasure with the effects tariffs are having back in their districts. But the Republican majority in both chambers has so far refrained from bringing legislation to a vote to reverse the steel and aluminum tariffs.

Before the tariffs were imposed, Craft Canning witnessed a years-long, gradual shift at microbreweries from glass to aluminum packaging. Lingley predicts that trend will continue despite the higher prices for aluminum cans.

"We see a lot of growth in canned beer, canned wine, canned kombucha," Lingley said. "We see the market moving to cans. That's what people want."