Brewers in the U.S. blame hiked tariffs for 40,000 job cuts

The tariff hikes imposed by U.S President Donald Trump are hurting the beer industry, trade groups have claimed.

As per a report released by the two trade groups, the American beer industry has lost 40,000 jobs since 2016. They state that aluminum tariffs have added to brewers’ costs and as a result led to reduced investments in the sector.

The Beer Institute together with the National Beer Wholesalers Association compiled a report from their study noting that direct, indirect as well as induced jobs, reduced from 2.23 million in 2016 to 2.19 million in 2018.

The Beer Institute’s chief executive officer (CEO) Jim McGreevy has said that the tariffs imposed on aluminum have led to increased cost on the side of brewers yet aluminum offers great support to the industry.

He said that as a result, every beer company now decides by itself on the next course of action to deal with the tariffs’ impact. Some have decided to pass costs on to the consumer by increasing the prices of products.

Meanwhile, a vast majority have elected to lay-off employees, with another group deciding to delay their innovation and expansion plans.

Following Trump’s 10% tariff on imports of aluminum, shipping and logistics costs have doubled as premiums went up. In 2018, Molson Coors Brewing projected that the expected levies would rise to $40 million.

But as industry players lay the blame on higher tariffs, it appears the increasing job losses may have its trigger from many other sources.

According to market analysts, consumption of beer, wines, and spirits has fallen for the last three years. Last year, consumption levels went down by 0.8 percent. Beer is the most impacted sector in the slump, going down by 1.5 percent over last year.

While tariffs are not “100%” the cause for the job losses, the beer industry says that since tariffs kicked in, brewers have had to bear increased costs and thus potentially impacting employee retention.