Beer makers in Canada are the next victims of tariff hikes.
Tariff hikes on Canadian imports in the era of Trump are affecting many areas of the country’s economy. The latest, somewhat surprising, victim? Canada’s craft beer makers.
Canadian craft beer makers have announced they are facing a shortage of cans to package their product and are blaming US tariffs on aluminium.
Canada is the world’s third largest producer of aluminium but it still imports more than 2 billion aluminium cans every year, the majority from the US. On July 1, Canada imposed tariffs on aluminium imports from south of the border as a reprisal for like-minded tariffs by the US government.
And Canadian craft beer makers, which are mostly small, specialist businesses, are deeply concerned.
The tariffs came at a time in which owing to changing consumer tastes, the North American canned beer market had expanded by 4.3% in 2017 while sales of bottled beer fell by 10.7%, according to government data.
Luke Harford, president of the industrial group Beer Canada, told AFP that the timing is particularly bad because of other factors affecting the country’s beer industry, such as higher taxes imposed on the sector by the Canadian government and the likely impact of legalized recreational marijuana sales beginning in October.
Furthermore, according to Harford, upon the announcement of the new tariffs, soft drinks makers, which generally use more aluminium than beer makers, began hoarding materials, effectively causing the current shortage.
One beer maker, Paul Meek of the Kichesippi Beer Company in Ottawa, said that his company was in dire straits, with sufficient aluminium stock to last only until the end of August. “If we’re left without cans, which today make up more than 50% of our sales, it’s going to be a real tough year,” he told Spanish newspaper El Pais.
Canada imposed tariffs on US aluminium, steel, and other imports worth an estimated $16 billion in retaliation to Trump’s own protectionist measures. Nevertheless, the Canadian government promised to earmark up to $2 billion to assist Canadian workers and producers affected by the trade dispute which began after President Trump announced his “America First” policy and claimed US workers had been negatively affected by existing trade policy in North America.
Both countries have taken their complaints to the World Trade Organization. The renegotiation of the North American Free Trade Agreement, or NAFTA, which is at the heart of the US-Canada trade dispute, remains unresolved with the two countries yet to arrive at a final deal on a revamped trade pact.