Posted Mar 07 2018 09:28PM CST
Video Posted Mar 07 2018 09:52PM CST
Updated Mar 07 2018 09:59PM CST
President Donald Trump is expected to sign an order issuing steep tariffs on steel and aluminum imports.
One industry that's worried about unintended economic consequences is the beer industry. It's especially worrisome for local craft brewers who rely on cheaper prices in order to remain competitive against the big dogs.
It's hard enough to start up a craft beer company. Texas Ale Project is in its fourth year. And now to learn of proposed tariffs on the two things they buy in bulk doesn’t help.
"We use aluminum in our cans. We also use stainless steel for our tanks, our brewhouse vessels, as well as all of our kegs,” said Kat Thompson, owner of Texas Ale Project.
With 60 percent of her product in aluminum cans, Thompson is worried about how the tariff will affect profit margins and whether the price for a six-pack will go up.
While a large brewer might be able to absorb the extra cost, smaller craft brewhouses may not.
“A lot of our beers are priced at $9.99. So does that mean now it's $10.29? And is the consumer going to buy as much of it if they see that price on the shelves?” Thompson said. “There's a real concern there among brewers that the volumes will come down because of that."
The Trump Administration and manufacturing advocates insist the proposed tariffs — 25 percent for imported steel and 10 percent for aluminum — won’t drive up prices because production of steel and aluminum in the U.S. would increase.
Larger companies are also angry. Last week, MillerCoors said the proposal could lead to job losses.
One other option is moving away from cans and concentrating more on draft beer business, but not every small brewer can do that.