President Donald Trump’s reveal of sweeping tariffs on Wednesday included a 25% tariff on all imported beer and empty aluminum cans. Those tariffs are expected to go into effect at 12:01 a.m. EDT Friday, April 4.
Previous reports stated that the tariffs would be on imported canned beer, however, the Brewers Association (BA) stated that its “analysis of the notice suggests that the tariffs will apply to all imported beer, not just canned beer.”
Beyond beer, Trump issued a 10% baseline duty on most countries (except Russia, Cuba, Belarus and North Korea) that is expected to start on April 5. Some trading partners will face stiffer levies, including China (34% tax in addition to 20% existing tariffs), the European Union (20%), Vietnam (46%), Thailand (36%) and Japan (24%), among others.
Reciprocal tariffs are expected.
The tariffs have stoked recession fears and spooked global markets. The Dow (-3%), S&P 500 (-3.77%) and Nasdaq (-4.81%) were all down as of this report. CNN reported the Dow fell 1,500 points, the S&P 500 reached its lowest point since September and trended toward its worst day since 2022. The tariffs have also weakened the U.S. dollar.
Canada and Mexico are exempt from the latest round of tariffs, but still face 25% tariffs implemented March 4, which included aluminum and steel. The U.S. imported more aluminum from Canada (93.4 million metric tons) than any other nation.
Mexico accounted for $6.3 billion of the $7.5 billion in beer imported into the U.S. last year, according to the U.S. Census Bureau.
Constellation Brands, whose portfolio includes top Mexican import brands Modelo, Corona, Pacifico and Victoria, is estimated to take a 25% hit to its operating income, according to Bernstein analyst Nadine Sarwat. She noted that 39% of Constellation’s beer is sold in cans compared to 58% in glass bottles.
Due to a consent decree, Constellation is required to import its products from Mexico. The company itself has not publicly put a number on the potential impact of tariffs.
Other major importers such as Heineken USA and Guinness-maker Diageo will also take a hit. Meanwhile, other mainstream brewers have already moved production stateside or are in the process of doing so, including Anheuser-Busch InBev’s Stella Artois, Molson Coors’ Peroni and Japanese brewers such as Kirin, Sapporo and Asahi.
Sarwat wrote that tequila is thus far excluded from the tariffs, but a 50% retaliatory tariff on U.S. whiskey remains a possibility.
“The U.S. consumer is already fragile. Pressured consumer wallets, especially for low-income households, is already a meaningful drag to alcohol consumption,” Sarwat wrote. “Should these tariff policies lead to further inflation (and therefore even more pressure on consumer wallets), this has the potential to place further pressure on alcohol volumes.”
Overall, metal cans account for 64.1% of packaged beer mix in 2023, according to the Beer Institute. For craft brewers, cans make up a much larger share of their packaging mix, as 75% of craft beer volume and revenue this year came from canned products.
Craft brewers are already grappling with the move amidst numerous existing headwinds, such as declining consumer interest, a growing moderation trend and already increased costs.
Port City Brewing founder Bill Butcher told WTOP News that a 25% tariff on pilsner malt from Canada would cause the Alexandria, Virginia-based craft brewery to raise prices. In a press conference with Sens. Tim Kaine and Mark Warner (both D – VA), Butcher said there are no U.S. grown substitutes for the strain of barley used to make Port City’s pilsner.
“We’re going to have to raise our prices,” he told the outlet. “This $12.99 6-pack of beer is going to end up at $18.99.”