All beer, regardless of the container in which it is sold, is affected by the 25% tariff on aluminum imports imposed by the United States. At least that’s the result of the new customs provisions introduced by the Biden administration.
Beer slipped under the radar on Wednesday, on a list of products related to aluminum that are now subject to a 25% import tax in the US.
The decision, buried in bureaucratic annexes, has sparked confusion and frustration among European beer producers and their customers, writes Politico.
Some confusion is blocking an industry
The customs code used - "malt beer" - seems to cover all beer, regardless of how it is packaged: in cans, bottles, or barrels.
This is particularly frustrating for beer producers, considering that most European exports of food and beverages have been subject to a lower tariff of 20%, making beer one of the most affected products in the agri-food categories.
"The wording refers to all beer, regardless of the container, but we are seeking clarification. Beer is not the only product that comes in cans," said an industry insider.
European beer exports to the US exceeded 1.1 billion euros last year, with Guinness and Heineken among the best-selling. Approximately one-fifth of this volume is shipped in cans.
The customs code applies globally, therefore even top exporters like Mexico, which supply over 60% of beer imports to the US, are affected.
Brewers don't know what to do
The vague wording of this code has left brewers in a fog, and they now don't know whether it's better to continue shipping beer to the US or to temporarily suspend exports and wait for clarification. Belgian brewers, who already operate on tight margins, fear that this impasse will drag on.
"We don't know how long the measure will be in place, and this uncertainty is already harmful," said Raf De Jonghe, head of the Belgian beer group BEER, to the Belgian newspaper Nieuwsblad.
Beer lovers were not at all pleased with this situation. On the Reddit r/beer group, a forum with nearly half a million beer producers and enthusiasts, the mood was bleak. "A huge tax on beer sales? How terrible" is one of the most appreciated reactions.
The industry's tone was more diplomatic. "Beer, like wine, is a product loved on both sides of the Atlantic and has been part of our culture for thousands of years. We strive to understand why it seems to have been downgraded to a simple 'aluminum derivative product'," said Julia Leferman, Secretary-General of The Brewers of Europe, a trade group representing thousands of brewers throughout the European Union.
The confusion has spread, and Politico has requested clarification from the US Department of Commerce. The institution maintains that the tariff does not apply to beer itself.
"Import tariffs on imported beer only apply to the aluminum content value of the beer can, not the beer itself. Imports of empty aluminum cans will be tariffed for their total value," said Jeffrey Kessler, Deputy Secretary at the Commerce Department's Bureau of Industry and Security, in a statement emailed to the publication cited.
There won't be enough aluminum for cans in the US
The European Commission estimates that the new tariffs announced by the Trump administration - including a general 20% tax and separate 25% taxes on cars, steel, and aluminum - will affect up to 70% of EU exports to the US, worth around 380 billion euros.
While Brussels prepares to respond, officials say they are deliberately postponing actions to avoid appearing panicked and to buy time for a negotiated solution with Washington.
The impact of the aluminum tariff will also be felt in the US. Much of the aluminum used in US can production comes from Canada, and American factories are not equipped to produce enough alloy used for beverage cans.
T.D.