Q&A: How Trump's tariff plans could impact Colorado's smaller brewers
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BOULDER, Colo. — To beer or not to beer?
That is hardly a question in the mind of Coloradans frequenting some of the state’s 400+ breweries. Colorado has the fourth-most breweries per capita in the United States and boasts barrels of home-brewed talent, many of whom took home medals at the U.S. Open Beer Championship last year.
Yet expectations flattened recently when the Trump administration announced 25% tariffs on steel and aluminum, prompting retaliatory tariffs from trading partners like Canada, the largest importer of U.S. malt barley.
This ever-changing brew of economic sanctions are proving challenging for many American brewers, and particularly the smaller brewpubs and independent operations, who are already facing rising costs on raw materials, property values and post-COVID competition.
According to the comprehensive Colorado Brewery List, 39 Colorado brewery taprooms closed in 2024. Only 32 new locations opened.
Bart Watson is the President and CEO of the Brewers Association, a nonprofit trade association based in Boulder that advocates for brewers through lobbying and educational resources.
The association works with about 6,500 brewers across the United States and internationally (including Canada) according to its website. Most of the breweries are smaller and independently-owned operations. Watson defined “small” as producing fewer than 6 million barrels.
Watson earned a bachelor’s degree in political science from Stanford University and a doctorate from UC Berkeley, where he lectured at the School of Public health before teaching political science at the University of Iowa.
He joined the Brewers Association 12 years ago as a staff economist, and in December 2024 he became President and CEO.
Rocky Mountain PBS recently spoke with Watson about the state of the brewing industry.
The following interview has been edited for length and clarity.
Video: Chase McCleary, Rocky Mountain PBS
Rocky Mountain PBS: What was the Brewer Association's response to first learning about the steel and aluminum tariffs imposed on March 12th?
Bart Watson: We are an association of American manufacturers, so we understand a desire to support American manufacturing and have more people buy local.
What we’ve been doing is learning from our members about critical points in their supply chain that are going to be affected by this, and then trying to tell that story to Congress that if you truly want to help this portion of American manufacturing, there might be some areas that you’d consider exempting.
Aluminum tariffs like these have been in place since 2018 — Section 232 tariffs — but we haven’t talked about it as much because there has been broad and wide exemptions.
Canada, for example, one of our largest trading partners, was exempt, and so it didn’t really matter as much.
But for now, we’ve primarily been focused on two things, which is barley malt and aluminum.
RMPBS: What are some of the concerns you have regarding barley?
BW: We very much have what I would call a North American barley system. Canada grows about two-and-a-half times the amount of barley the United States does, and where we grow barley in the United States is right along the border of Canada.
That’s a long-winded way of saying craft companies in the U.S. get a lot of their barley that goes into their malt from Canada, and while that might change over time, it’s unlikely to change overnight. Developing these barely varieties can be a 10-year process, and U.S. malting companies rely on Canadian barley when quality or quantity issues arise.
Our estimate is that independent U.S.-owned breweries source around 40% of their barley from Canada, and that’s unlikely to change, even with the tariffs in place. So it’s just going to be a cost increase for American manufacturers.
You talk to barley farmers, and they have their own individual concerns that are different than ours, which are how we’re going to be buying Canadian barley. A lot of U.S. barley actually goes to Mexico to go into beer, and then comes back to the United States, so this is a complicated story. There’s a lot of ripples here.
RMPBS: Can you walk through a few of the Brewers Association’s concerns about tariffs placed against aluminum and steel?
BW: I’ll start with steel. We’ve been talking less about steel, but steel certainly will matter for anyone who’s starting an American-made brewhouse, building fermenters… there’s a lot of stainless steel in breweries.
One of the pieces that might be affected are kegs. We import almost all of our kegs, so the United States probably wouldn’t have any kind of immediate direct impact because you don’t have to buy new kegs all the time, but we don’t make a lot of kegs in the United States, so that could be something to watch in the future.
But steel for start-up breweries and breweries that are expanding certainly matters.
For breweries ongoing operations, steel won’t matter quite as much, but aluminum is the preferred packaging for many small brewers. About 75% of packaged product now goes into aluminum cans.
A lot of breweries during COVID shifted more into aluminum packaging because bars and restaurants shut down, and people couldn’t go out and have a pint of beer. So they put more beer in cans.
We’ve seen a huge shift to aluminum cans over the last decade, and for many brewers, that’s all they package in. Coke came out and said they’re not too worried because they can just put more stuff in plastic bottles, but most of our members only have one packaging line: aluminum cans.
Now, American brewers are mostly buying from American can companies using American-made can sheets. Our data suggest that about 70% of aluminum used to make that canned sheet is recycled. So that’s domestic.
And then 30% of the aluminum that isn’t recycled is about half-and-half imported to domestic. Of the imported piece, Canada is by far the largest trading partner here.
So if you do the math, it works out to about 10% of every can in the United States is Canadian aluminum.
That is something that’s not necessarily going to shift. We’re not going to suddenly see a bunch of American aluminum capacity come online, so it’s going to lead to higher prices for that portion of aluminum that are just getting imported.
RMPBS: What are some alternative solutions the Brewers Association is lobbying for in Congress?
BW: We’re trying to learn right now how open the administration is to exemptions. If Canada were to be exempt again, this becomes less of a concern. What our members are really concerned about is not access — we’re not going to run short of aluminum cans, we already went through that once with the pandemic — but pricing.
We’ve already seen this show up in pricing. A brewer ordering cans today is going to pay more than they would have paid a few months ago.
And one of the biggest concerns for us holistically is this on top of the cost environment that already went up in the last few years. CO2 has gone up, paperboard has gone up, malts have gone up.
We’re talking about additional price increases on top of all that other stuff, and that forces breweries to make difficult choices today: do they wait and see their margins get eroded further, or do they pass them on to customers and risk losing volume.
Large, publicly-traded companies are often financially hedging and using financial instruments so that if prices go up, they’ve already got it built in to counteract that risk.
But small companies are calling up their suppliers and finding out prices that day. They have much less ability to get ahead of this. There’s still a lot of learning, but there’s only so much time smaller companies can wait and see.
So we’re focused on understanding the administration’s appetite for exemptions, which I think is still a little unclear at the moment. We’re trying to help American manufacturing, but having a tariff on Canadian barley doesn’t help American manufacturing, so creating exemptions there could help in the broader context of what we’re all trying to achieve.
RMPBS: On March 13, President Trump threatened 200% tariffs on all alcohol imported from the European Union. While these are not currently in place, how might these added sanctions impact the domestic beer industry?
BW: I think wine and spirits are a little bit more exposed to some of those potential actions. We don’t import a ton of beer into the United States, and some large companies have already moved production of these brands to the United States, like Stella Artois [originally from Belgium].
From certain members, that may matter, but Canada is where our focus is at the moment.
Type of story: Q&A
An interview to provide a single perspective, edited for clarity and obvious falsehoods.
An interview to provide a single perspective, edited for clarity and obvious falsehoods.
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