What Trump’s Election Means for an Uncertain Craft Beer Industry

As the dust settles from the last US election, industries across the country and planet are trying to understand what impact Donald Trump’s second term election will have on their interests. As of the publication of this story, Mr. Trump is guaranteed a Republican Senate majority and likely a Republican majority in the House of Representatives. This will give him full authority to pursue his vision for American business unimpeded.

The US beer industry, and especially the craft brewing industry, is watching these developments closely. Both have been plagued by a series of challenges (imported beer, tariffs, consumers drinking less) that have caused sales to decline. The possibility of high tariffs in the red-hot Mexican beer market and the overall import market could push drinkers to domestic beers. and if sales declines reverse, other issues could offset those gains.

According to the Brewers Association, 2023US beer production volume decreased 5.1%, while craft beer production decreased 1%. These figures also reflected declines in U.S. beer sales volume for 2023.

Market uncertainty could have dire consequences for an industry founded by and supported by independently owned microbreweries. In 2023, the sector reached a total of 9906 breweries, a net increase of 72, and 405 businesses were closed. This is a stark change from pre-COVID times when the industry experienced tremendous growth.

According to the mid-year report of the Brewers Association, these problems continued in the coming period. 2024Craft beer sales fell 2% year over year. One of the biggest concerns of brewers surveyed was inflation and rising commodity prices affecting sales.

There’s one factor causing uneasiness, especially among brewers in the US: Trump’s embrace of tariffs on imported goods. During his first term as president, Trump has been a vocal critic of international trade agreements. HE took the USA out General tariffs were applied to a large number of products. When it imposed a 10% tariff on aluminum imports in 2018, the craft beer industry decried its effects on their industry, saying it led to price increases for consumers and the loss of 40,000 jobs, according to a 2018 biennial. to work From the Beer Institute and the National Beer Wholesalers Association.

This issue was brought to the agenda after the election daily publication From BA to its members. He noted several potential problems for small and independent breweries. He warned breweries that Trump has been quite vocal about his support for increasing tariffs and possibly imposing new tariffs. This could have a serious impact on aluminum can pricing and brewing equipment, which are heavily dependent on imports from China, where Trump has suggested in his speeches that he could impose new tariffs of up to 60%.

BA also warned its members about various tax-related concerns under the upcoming Trump administration. The 2025 expiration of the 20% deduction for pass-through entities such as sole proprietorships, partnerships and S corporations could impact breweries. Also discussed was a possible exemption from income tax on tips for front-of-house workers in taverns, restaurants and bars. BA warned that the government’s estimated $10 to $25 billion in lost tax revenue could be replaced by another tax or means of raising revenue.

One of the final issues BA identifies is the high likelihood of funding cuts to federal agencies. The Alcohol and Tobacco Tax and Trade Bureau, which oversees the U.S. beer industry, the USDA Agricultural Research Service and other key agencies involved in brewing, could be in trouble if their funding is cut. This can create numerous obstacles to getting new beers and labels approved for mass production, creating new hops and grains for brewing, and many other issues.

None of these potential problems bode well for the beer industry. As we move forward, one thing is certain: An already challenging market for alcohol, especially beer, could become even more complex.

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