Trump Administration Announces New Trade Actions

Yesterday, the Trump Administration announced two significant trade actions that could affect the craft brewing industry. The first invokes Section 338 of the Tariff Act of 1930, a rarely used authority, to impose a 50% tariff on certain Canadian imports beginning August 19 in response to Canadian provincial restrictions on U.S. alcohol beverages. The Administration argues that Canadian provinces have discriminated against American beer, wine, and spirits by removing U.S. products from government-controlled liquor stores while continuing to sell products from other countries. According to the White House, U.S. alcohol beverage exports to Canada fell approximately 81% between March 2025 and February 2026 because of the provincial bans. Canadian authorities restricted purchases of U.S. alcohol beverages last year following the U.S. imposition of tariffs on certain Canadian goods.

Canada has historically been the leading foreign destination for many independent craft breweries, particularly those located near the northern border. While the proclamation does not immediately reopen the Canadian market, it aims to pressure Canadian provinces to lift restrictions on U.S. alcohol beverages. Until those restrictions are removed, however, breweries that previously exported to Canada are unlikely to see near-term relief.

The Administration also issued a separate proclamation modifying its Section 232 aluminum tariff policy. The proclamation directs the Department of Commerce to create a new investment incentive program. Under the program, whose details remain unclear, companies that commit to building, expanding, or refurbishing U.S. primary aluminum smelters may receive permission to import a corresponding quantity of primary aluminum at a 25% tariff, compared to the otherwise 50% Section 232 tariff rate.

The aluminum announcement is unlikely to provide immediate relief for craft brewers, who continue to face elevated aluminum packaging costs from the existing Section 232 tariffs. Aluminum cans remain the dominant package format for independent breweries, making can prices one of the industry's largest operating expenses. Because small breweries purchase significantly lower volumes than multinational competitors, they generally have less leverage to negotiate favorable pricing or absorb increases in packaging costs. If the new investment program ultimately results in additional domestic smelting capacity, it could strengthen the long-term aluminum supply chain and improve price stability for can manufacturers. Until that capacity comes online, however, most craft brewers should expect aluminum costs to remain elevated while ongoing Section 232, Section 301, Section 338, and United States-Mexico-Canada Agreement (USMCA) negotiations continue.

The Brewers Association will continue to engage with government officials to remove trade barriers impacting craft brewers.