Reality Check: What tariffs mean for WNC breweries
TRANSYLVANIA COUNTY, N.C. (WLOS) —
The U.S. government started collecting an additional tax on imported steel and aluminum -- two materials on which brewers rely heavily.
President Donald Trump imposed a 25 percent tariff on steel and a 10 percent tariff on aluminum. The Beer Institute estimates the aluminum tariff will cost the country's breweries more than $340 million per year. Local breweries are trying to figure out what the tariffs will mean for them.
Ecusta Brewing opened in Pisgah Forest almost two years ago.
Brewing relies heavily on metal, specifically steel. It's what the tanks and kegs are made of. Bill Zimmer, one of Ecusta's co-founders, estimates kegs from China cost about $30 less than a keg from Germany. He took notice when the president announced tariffs, which could increase the brewery's operating costs.
"Everyone's first inclination was jumping on the aluminum increase. For us, I thought more about the steel, because we had to add in more stainless steel tanks, which also requires more cooperage and more kegs. So that steel issue kind of comes up right away," Zimmer said.
Zimmer said the tariffs won't have a huge effect on the bottom line, but it will impact some business decisions and affect who the company buys some items from.
"The can is everything to us," said Aaron Baker, from Oskar Blues Brewery.
Oskar Blues markets itself as the original craft beer in a can. The brewery worries about the aluminum tariff. It only packages beer in cans. The Brevard brewery's canning line runs three shifts. The brewing company estimates the tariff will cost it an extra $400,000 per year.
"It's a little more difficult to make business decisions and hiring decisions on big capital expenses become a little more difficult to rubber stamp, because there's a little more uncertainty out there," Baker said.
The federal government announced several allies will receive exemptions from the tariffs, and it also opened an application period for further exemptions. The tariffs added uncertainty, but Zimmer said tariffs are not his biggest concern.
"I think we're more worried about an increase in number of breweries, a variety of other factors that may have a more real, damaging effect. This is just one of those. We have hops. We have yeast. We have grains that all have fluctuating costs in terms of our supply chain. So, it's not atypical for a brewer to understand fluctuating costs in their supply chain," Zimmer said.
It will take some time to figure out the extra costs to brewers and other businesses. For now, Oskar Blues said it does not plan on a price increase.