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16 Apr 2025 17:57
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  •   Home > News > International

    For America's small businesses, Trump's tariffs are delivering some unwelcome surprises

    Virginia brewer Bill Butcher is already dealing with some of the unexpected consequences of Donald Trump's tariffs — including a sudden scarcity of beer bottles.


    American brewer Bill Butcher always knew Donald Trump's tariffs were going to push up the costs of making beer.

    But the tariffs are delivering some unexpected consequences, too.

    Mr Butcher's bottle supplier, who he's been buying from since opening his Virginia brewery 14 years ago, has suddenly cut him off.

    The reason? Tariffs are pushing up the cost of cans, and bottles are suddenly in high demand.

    "The major, mega international brewers, they don't want to pay these aluminium tariffs either, so they've been shifting their production back to bottles and have monopolised the bottle supply in the United States," he said.

    "So we're kind of in limbo now, trying to figure out where we're going to get bottles from."

    His microbrewery only has a few weeks to find another bottle supplier before it runs thin on inventory. "I still don't have an answer," he told the ABC.

    Across America, businesses like Mr Butcher's are dealing with the sometimes surprising consequences of the president's tariffs regime.

    Last month's 25 per cent tariff on aluminium imports and its flow-on effects for breweries were just the start: the president's much broader "reciprocal tariffs" begin to come into effect on Saturday.

    A minimum 10 per cent tax will be placed on almost every import and, from Wednesday, products from certain countries will be taxed at even higher rates.

    Harder for the 'little guy'

    The US Chamber of Commerce says the tariffs will have a "real, devastating impact on thousands of small businesses across the nation".

    For food and beverage companies like Mr Butcher's, the increases in both produce and packaging costs are among the biggest worries, according to the US's National Restaurant Association.

    President Michelle Korsmo said food costs for American restaurateurs had already increased 40 per cent in five years. She's lobbying to have food and beverages exempted from the tariffs.

    Mr Butcher says he is just one example of the little guy getting pushed out, as larger companies use their resources to adjust their business models and deal with disrupted supply chains.

    "We don't have piles of cash sitting around that we can [use to] lock up future stores of ingredients," he said.

    "So small businesses are going to be affected much more greatly, much more negatively than big businesses."

    As markets tanked in the US and beyond in the wake of the tariffs announcement, Mr Trump insisted his country was "healing".

    "The markets are going to boom," he told reporters on Air Force One on Thursday, local time.

    Asked for his message to businesses worried about the tariffs, he said: "I think it's going to all work out."

    The president insists manufacturing will return to the US, making local businesses less reliant on imports and therefore less affected by tariffs.

    But he said there would be "a transition period, because they're going to be building instead of paying tariffs to some other place".

    Early signs are the public is unconvinced by Mr Trump's policy.

    In a YouGov poll shortly after his announcement, 40 per cent of respondents "strongly" disapproved of it, and 11 per cent "somewhat" disapproved. Only 15 per cent "strongly" approved, 19 per cent "somewhat" approved and 15 per cent were unsure. Two thirds of people expected increases in the prices of the products they usually buy.

    'Uncertainty and chaos'

    The effects of the president's tariff agenda will become clearer in the coming months when the taxes have time to take effect.

    But most top mainstream economists are united in agreement that they will increase the price of many everyday items in America. Some are warning of a recession.

    Mr Butcher prides himself on the quality of his craft beer. His tasting showroom has framed awards, spanning a decade, hung along the walls.

    "Our product is an everyday luxury and it's something that brings a little bit of joy to everyday life," he said.

    To do that he sources machinery and ingredients from around the world.

    The base malt for most of his beer is from Canada, the bottle caps are made in Mexico and the machinery that pulls it all together comes from Europe.

    Then there are the specialty beers Port City Brewing Company make with hops from German, England and the Czech Republic.

    Many of those locations are facing tariffs higher than the minimum 10 per cent "baseline". Imports from the EU, for example, are subject to a tariff of 20 per cent.

    To remain open, Mr Butcher says he will have to factor any price increases into the cost of his products and pass on to the consumer.

    "This is a global supply chain and we work with partners all over the world to brew the beers that we want to make," he said.

    "We're still going through what we think is going to be included in the tariffs and what's not going to be included … it has really put a lot of uncertainty and chaos into our supply chain."

    "We face business challenges every day, but this is one that was unnecessary and we're shooting ourselves in the foot."


    ABC




    © 2025 ABC Australian Broadcasting Corporation. All rights reserved

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