By: Tom Hudock | Craft Buildings

The craft beer industry in the United States is currently facing significant challenges due to new tariffs imposed on imported aluminum and steel. Effective March 12, 2025, these 25% tariffs are expected to substantially increase production costs for craft brewers, who rely heavily on aluminum cans and steel kegs. For instance, a Nashville craft brewery anticipates higher expenses as a direct result of these tariffs.

These tariffs are part of a broader trade dispute between the U.S. and the European Union. In retaliation for the EU's proposed 50% tax on American whiskey imports, President Donald Trump has threatened to impose a 200% tariff on European alcoholic products, including wines and spirits. This escalation raises concerns about potential price increases for consumers and financial strain on producers across the Atlantic.

The imposition of these tariffs has sparked fears among European beer and wine producers about the viability of their U.S. market presence. Industry leaders warn of severe economic repercussions, including potential job losses, if these trade barriers remain in place.

Impact on Commercial Project Budgets and Feasibility

The additional costs resulting from tariffs may strain project budgets, potentially leading to the scaling back or postponement of planned developments. For example, a $5 million dollar brewery production facility project could see an increase of approximately $50,000, representing 1% of total project costs. If further tariffs are enacted, total cost increases could escalate even higher.

Considerations for Contractors and Developers of Craft-Related Developments

Contractors and developers should proactively assess the potential financial impacts of tariffs on their projects. Strategies may include:

Budget Adjustments: Revising budgets to account for anticipated increases in material costs.
Supply Chain Planning: Identifying alternative suppliers or sourcing materials domestically to mitigate tariff effects.
Contract Clauses: Incorporating tariff escalation clauses in contracts to address unforeseen cost increases.

Staying informed about policy changes and engaging in strategic planning are essential steps to navigate the evolving landscape of commercial construction amidst these tariff-induced challenges.