Here’s a bold statement: The humble beer you enjoy on a Friday night could soon become a pawn in the high-stakes game of international trade—and it might just change the face of the U.S. beer market forever. But here’s where it gets controversial: While tariffs under President Trump’s administration were touted as a way to boost domestic industries, new research suggests they might do more harm than good for the nearly 10,000 small, independently owned craft breweries across the U.S. Instead, the real winners could be the multinational giants that dominate the industry.
According to Aaron Staples, an agricultural economist at the University of Illinois Urbana-Champaign, the $117 billion U.S. beer market is divided into three main segments: craft beer brewed by small businesses, domestic non-craft beer owned by multinational firms, and imported beer. Tariffs, he explains, can raise production costs for domestic brewers and increase the price of imported beer. When these costs trickle down to consumers, it’s not just about paying more—it’s about how these price hikes reshape buying habits. And this is the part most people miss: The impact isn’t evenly distributed. Multinational firms, with their economies of scale and supply chain clout, are better positioned to absorb these costs, while small craft breweries could face disproportionate price increases, potentially losing market share.
In a study published in Food Policy, Staples and co-author Michael McCullough analyzed how tariffs might affect beer demand, market shares, and consumer welfare. Using data from over 700 U.S. beer drinkers, they found three key takeaways:
- Domestic production could rise, but the benefits would likely skew toward multinational firms, not local craft breweries.
- Small businesses are at risk of losing ground due to their limited economies of scale and less flexible supply chains, which could force them to raise prices more than their larger competitors.
- Consumers could pay the price—literally. The net reduction in consumer welfare from higher beer prices ranges from $53.1 million to $306.4 million, depending on the tariff structure.
Here’s the kicker: While tariffs aren’t directly imposed on consumers, their impact is undeniable. Take imported beer, for example. Since 2013, the U.S. market share for imports has jumped from 14% to 24%, with Mexico alone accounting for 83% of these imports. That’s roughly one in five beers consumed in the U.S. coming from south of the border. While Mexican beer was initially exempt from tariffs under the USMCA, a 50% tariff on the aluminum content of imported beer now looms large. If this cost is passed down the supply chain, your favorite Mexican lager could get pricier. Worse, smaller international brands might pull out of the U.S. market altogether, reducing the variety of beers available.
In this scenario, the market share for imports could shrink, and any gains in domestic production would likely flow to the multinational companies that sponsor Super Bowl ads, not the small craft breweries that have become pillars of local communities. But here’s a thought-provoking twist: Some multinational firms are already pivoting their strategies, investing in new U.S. production plants and rebranding their beer as ‘American made’ to capitalize on nationalist sentiment. Is this a clever business move or a sign of deeper market manipulation?
The impact of tariffs isn’t limited to imported beer, either. Domestic brewers rely heavily on international trade for key inputs like malt, hops, steel, and aluminum. When tariffs drive up the cost of these materials, domestic production costs rise. While businesses might absorb these costs initially, there’s a breaking point—and when it hits, consumers will feel it in their wallets. This is especially concerning for craft brewers, which operate on thinner profit margins and have less flexibility to weather market disruptions.
Here’s the real question: If craft breweries start to struggle, what does that mean for the local economies they support? The effects of tariffs might not be immediate, but once beer prices rise, they rarely fall back down. And with the legality of certain tariffs now under scrutiny, the situation is anything but certain.
So, what do you think? Are tariffs a necessary tool to protect domestic industries, or do they unfairly tilt the playing field toward multinational giants? Could this be the beginning of the end for the craft beer boom? Let us know in the comments—this is one debate that’s sure to brew up strong opinions.
