Tariffs stack more pressure on U.S. craft breweries, according to GlobalData report

Tariff increases threaten an industry already in decline

U.S. craft breweries face growing financial strain as steel, aluminum, barley, and malt tariffs intensify. According to a new report from GlobalData, these trade barriers are inflating costs across the industry — from raw materials to essential brewing equipment. These added pressures come at a time when the industry is already struggling. For the second consecutive year, more U.S. craft breweries closed than opened, according to the Brewers Association. With operating costs rising and consumer demand plateauing, especially among younger drinkers, many small brewers find themselves at a breaking point. From the press release:

William Gould, Consumer Analyst at GlobalData: “The US craft beer industry is at a critical juncture, facing the dual challenges of rising production costs due to tariffs and shifting consumer preferences towards product origin. The historical growth of the craft beer sector has been remarkable, but the current landscape necessitates strategic adaptations to navigate these challenges effectively. Brands must be proactive in understanding the implications of political and economic changes while also aligning their messaging with evolving consumer values.”

Doubling down on steel and aluminum

On May 30, President Trump announced plans to double tariffs on imported steel and aluminum — from 25% to 50%. The new rates take effect June 4. This follows the earlier March 12 activation of 25% tariffs under Section 232, which invokes national security concerns to justify import duties. These materials are crucial to brewers. Aluminum cans make up 75% of packaged craft beer by volume. Canada, the largest supplier of U.S. aluminum and steel, is now included in these tariffs. Costs for kegs, brewhouses, tanks, and even building infrastructure are climbing fast.

Imported kegs under threat

GlobalData’s analysis points to another brewing challenge — kegs. Many are sourced from Germany, and current U.S.-EU negotiations have extended to July 9. Without a deal, tariffs on EU goods could spike to 50%, putting further upward pressure on imported steel products. This spells trouble for small brewers reliant on European-made stainless steel kegs and systems, especially those with no economies of scale to cushion the blow.

Exports to Canada now in Jeopardy

Canada is also the top market for American craft beer exports. But anti-American sentiment driven by tariff policies is shifting buying behavior. GlobalData’s Q1 2025 survey shows 85% of Canadian Boomers and 71% of Gen X consumers are reconsidering U.S.-made products. Some Canadian retailers have already pulled American alcoholic beverages. That means reduced shelf space and revenue for U.S. brewers trying to grow outside their local markets. Via an article on the Brewers Association’s website from Katie Marisic, director of trade, tax, and federal government relations at Diageo:

Even without retaliatory tariffs, small and independent breweries that export beer to Canada have already seen the impacts of tariffs, with some provinces canceling shipments of U.S. alcohol beverage products or encouraging consumers to buy Canadian-made products. Canada imports 37.5% of American craft beer exports, making it our industry’s largest export market. If Canada, Mexico, and other trade partners decide to retaliate, breweries could see tariffs on their exported beer.

Consumers are watching origins

In the United States, 55% of Gen X and Boomer shoppers now consider product origin due to political events, according to the GlobalData report. This trend favors local brands but adds pressure to source domestically — even as costs for domestic steel and aluminum spike from tariffs. Craft breweries may benefit by emphasizing local roots and transparency. However, branding alone can’t offset the rising cost of materials, packaging, and equipment.

Brewers already paying more

Aluminum can prices are up. Equipment vendors are raising quotes on stainless steel. And raw ingredient costs — especially malt and barley — are climbing due to global trade tension. All of it affects profit margins. For small breweries, which often operate on razor-thin margins, this is a real threat. They can’t always pass price hikes to customers, especially in a softening market. The U.S. craft beer industry is facing a new reality. The GlobalData report is a warning: survive by adapting, or risk closure. Tariff-driven price hikes, soft demand, and geopolitical shifts have combined to reshape the landscape.

Small brewers will need to:

• Audit sourcing for materials and ingredients
• Emphasize local production in marketing
• Rethink export strategy to Canada and the EU
• Delay or modify expansion plans reliant on imported steel or aluminum equipment

Stay informed, stay resilient

We will continues to monitor and advocate for independent breweries affected by these policies. With shifting trade relationships and more tariff threats looming, staying updated is essential for small brewers. Check back with us for updates. Today’s big takeaway: rising tariffs aren’t just a national issue — they’re a local brewery’s next big challenge.