Tariffs are no more than another tax on American businesses and consumers. While the financial burden is first applied to the business that imports the product, it quickly trickles down the supply chain—increasing productions costs, shrinking sales for domestic businesses, and ultimately increasing prices at the cash register.
The current trade war—initially sparked by tariffs on imported aluminum and steel into the U.S.—is notably impacting the alcohol industry and all associated businesses. The 10 percent tariff on aluminum is directly impacting the bottom line of American brewers because the price of every aluminum can and bottle they fill is increasing. As a result, brewery sales could potentially decline as the sticker price of every beer is driven upwards.
The impact on American distilled spirits is similar. While they are not a direct target of U.S. imposed tariffs, they are the victim of retaliatory tariffs instituted by foreign leaders. In fact, 46 percent of all distilled spirits exports are facing or at risk of retaliatory tariffs.
The impact of these trade penalties are far reaching and will have a major impact on the economy. The American beer industry is responsible for 2 million jobs and $350 billion in annual economic activity. And American distilled spirits are indirectly responsible for 1.5 million jobs and export $1.64 billion worth of product every year. From here, the consequences will ripple throughout restaurants, bars, and other entertainment venues across the country.
ABI argues that the supposed benefits of tariffs are far outweighed by the broader economic consequences that alcohol producers, sellers, and consumers will experience. Learn more by watching a short animated video here.