CLEVELAND, Ohio – The fallout from any trade war over tariffs affecting aluminum and other exports is looming like a storm on the horizon.
Like any storm that ravages whatever is in its path, it has the potential to affect multiple aspects of the brewing industry. And the rumblings started years ago.
“If you look at the complete story arc - we’re very concerned about it here in 2025, but it started in 2018 with the first round of tariffs,” said Dave Sutula of Canton-based Royal Docks Brewing Co.
Sutula sees two forces at play: “Big brewers and other manufacturers were going heavily into ready-to-drinks and seltzers. Manufacturers were changing their lives to handle sleeks (different sized, narrow cans) and not necessarily beer cans. As the same time, 2018 tariffs caused a massive shortage, just in time for Covid to take the lifeblood out of the taprooms. Putting beer in cans became part of survival - not just business strategy, but literally feeding-your-family strategy. And they were unavailable.”
Related: Will 200% EU wine tariffs change U.S. drinking habits?
The specifics of the current climate are tough to nail down, said Matt Cole of Middleburg Heights-based Fat Head’s Brewery, but he sees potential problems down the road.
“It’s hard to say yet, and that’s the problem,” he said. “There’s a lot of uncertainty and there’s a lot of unknowns.”
Those unknowns are on the minds of brewers and workers in the industry because of the tit-for-tat tariff imposition resulting from President Donald Trump’s initial salvos to Canada in particular. The tentacles snapping at the supply chain lash out at multiple industries including beer, and many products brewers use in addition to cans.
In 2023, Canada’s largest export destination for aluminum products was the United States, which accounted for 90.3% of the total value of aluminum exports, according to government statistics from Canada.
In a story Monday, Packaging Insights quoted U.S. Aluminum Association president and CEO Charles Johnson as saying continued growth in the industry requires two things: “Long-term market certainty and a reliable supply of affordable metal, which today comes in large part from Canada.”
The publication also quoted Canadian Steel Producers Association president and CEO Catherine Cobden as saying the recently leveled tariffs have “deeply damaged” the trading relationship between the nations, forecasting “devastating repercussions on both sides of the border.”
In 2017, the Beer Institute, a national trade association, said aluminum used in cans was the single most substantial cost in American beverage and beer manufacturing, though recent figures are not available.
The non-profit Ohio Craft Brewers Association and the national Brewers Association are opposed to increased import tariffs.
“We ask leaders in the federal government to carefully consider the disastrous unintended consequences of import tariffs on not only our industry, but the millions of small businesses that power the American economy,” the OCBA said in a press release. The organization added the effects could result in decreases in Ohio jobs and philanthropic donations from breweries.
Craft breweries embraced cans because of their sustainability resulting from their ability to decrease greenhouse gas emissions. Around 2020, production of craft beer cans surpassed that of bottles.
“It’s going to have a ripple effect. It’s just too early to tell how it’s going to impact us,” said Cole, who estimates his brewery goes through 10 million cans annually.
Fat Head’s and other breweries work with larger manufacturers involving production of aluminum coils, which create cans and lids. A potential price increase on the London Metal Exchange would have a domino effect on breweries, he said.
“If the price of a coil goes up, our manufacturer is going to charge more for the can. We don’t know quite yet how that’s going to impact us, but it’s going to impact us. We just don’t know to what level,” Cole said.
Other vessels are unlikely options, he added, and while Fat Head’s still has a bottling line, ramping up production is unlikely.
“I don’t think we will go that route,” he said.
When Royal Docks started canning beer in 2017, it cost 16 to 18 cents per can based on size. Before the recent round of tariffs, it hit 32 cents, Sutula said.
“Everybody is real concerned about what happened this week, because it’s something we’ve been dealing with for quite some time,” stressed Sutula, who estimated Royal Docks produces more than a million cans per year.
For now, Fat Head’s has tried to remain as proactive as possible.
“We front-ended a lot of cans. Our building is just literally full of millions of cans to try to prepare for the increases. We’ve done some other things. We can kind of offset some of those costs by going to painted cans,” Cole said.
Painted cans are cheaper than ones that use sleeves on blank cans. But huge volume is needed, requiring “upfront costs” and a lot of storage. That, Cole said, is not feasible for smaller breweries.
“I think you’ll see more soda companies – even though I don’t think it’s good for the environment – you’re going to start seeing more plastic. Especially if this thing runs on longer.”
The type of bottles Cole is referring to are polyethylene terephthalate, or PET. They are ubiquitous, from water to soda, and they are easily recyclable. But that doesn’t mean people are doing it. The majority of PET bottles in the United States are not recycled properly.
“Unfortunately we’re held hostage by not knowing, and we’re trying to do things proactively like getting more efficient, and getting more painted cans and being more competitive. But it really sucks we’re caught in a predicament.”
That predicament also encompasses the ripple effects Cole referred to. For instance, malt comes from Canada.
“Now we might have the ability to switch to a domestic barley grown in Idaho or something like that, but it has to get shipped farther. It’s going to have a ripple effect, and at some point beer is going to get more expensive.”
Reliance on domestic malt production just isn’t there on a large scale. The OCBA said in its release that “There simply is not enough domestic cultivation of barley or production of primary aluminum to sustain the industries that rely on these products without imports from Canada and elsewhere. Imposing tariffs on these products, regardless of the rationale, punishes American businesses.”
Sutula said 40 percent of “brewery barley” grown in North America comes from Canada. And that’s not the only ingredient. He said the cod the brewery uses in its fish and chips also comes from up north.
“We didn’t even know this until recently. It’s caught in Canadian waters. All of that is going to go up. And who knows what else?”
Also, products subject to price fluctuation because of tariffs are not relegated to Canada. Tariffs affect Mexico and China, he said.
Yet another effect: Fat Head’s leases all its kegs.
“For us to buy kegs we would have to fork out $3 million, which we can’t financially do,” Cole said. “So we lease the kegs. We pay per fill to have the luxury of them owning the keg. But almost all of those kegs are produced in China or overseas, and the steel prices are going to go up, so the manufacturing prices of kegs is going to go up, so their prices are going to go up and they’re going to pass that on to us and that’s going to make everything more expensive. So it really isn’t just the aluminum cans.”
The looming date for all sides is Wednesday, April 2, which Trump has said is when the next round of tariffs will go into effect. Adding to the current challenges swirling now in the beer industry: Consumer confidence is down, product prices are up, the brewing industry had a rough February, and consumer trends are shifting to different products and non-drinkers. Plus don’t discount other costs – paper and cardboard for carrier packaging adds up.
“Where is the paper industry in North America? It’s in Canada,” Sutula said.
That means “Everything is going to get hit, including your fish and chips and probably the paper that fish and chips comes on.”
As has been reported since the moment Trump announced tariffs were in the works, costs get passed down. Royal Docks has had to raise six packs about a buck, Sutula said. The brewery’s most expensive beer – the award-winning Vlad the Impaler Imperial Stout - is $12.99 for a four-pack.
“That’s going to have to go up,” Sutula said. “There just no way around it.”
Despite the challenges Cole keeps a steady head as clouds darken, saying: “I think we’ll weather the storm.”
Sutula agrees in guarded principle with Cole’s outlook.
“We’ll figure it out somehow. But who knows? Certainly it’s going to stifle growth,” he said.
In the end it comes down to the age-old American supply-and-demand question.
“It depends on what the customers’ appetite for expensive beer is,” Sutula said.
Stories by Marc Bona
I cover restaurants, drinks, sports-related and other topics on our life and culture team. For my recent stories, here’s a cleveland.com directory. WTAM-1100’s Bill Wills and I talk food and drink at 8:35 a.m. Tuesdays. Twitter and IG: @mbona30. To check out my books, go to marcbona.net.
Want to know what’s going on in the weekend? Sign up for cleveland.com’s weekly “In the CLE” email newsletter. Also: Follow @DineDrinkCLE on Instagram.