Why Beer Could Get More Expensive Under Trump’s Tariff


As previously noted, the Trump Administration's recently announced tariffs could have a real effect on the alcohol industry. The Wall Street Journal reports on how the aluminum tariffs could lead to higher beer prices:

"President Donald Trump’s planned 10% tariff on aluminum imports could hit America in its beer gut.

Beverage makers, including Heineken, Molson Coors Brewing Co. and Coca-Cola Co., who use aluminum cans had warned Mr. Trump last month of increases in production costs if the tax were imposed. Some of those costs are likely to be passed on to consumers, according to analysts. The Beer Institute, a trade group, said Thursday the tariff would amount to a $347.7 million tax on brewers and result in the loss of tens of thousands of jobs.

“Businesses don’t assume cost increases, they pass them on to consumers,” said Nico von Stackelberg, a consumer-goods analyst at Liberum.

More than half of the beer produced annually in the U.S. is sold in aluminum containers and is traditionally marketed to cost-conscious consumers. Cans of Natural Ice, known as “Natty Ice,” are staples of cash-strapped college students and Bud Light has become a symbol of working class America, which is a key part of Mr. Trump’s political base.

Cans are cheaper and easier to ship than bottles and they protect against ultraviolet rays, reducing the risk of beer going stale, or skunked.

The tariffs could also hurt craft beer. Part of the reason artisanal brew is increasingly sold in cans, producers say, is that aluminum offers a good surface for colorful, effective branding..."

Read the rest here.

R Street's Trade Policy Counsel Clark Packard signed a letter along with other leading trade policy experts speaking out against the tariffs