When Frothy Beard Brewing Co. started canning its signature jalapeno cilantro pale ale in October, the bright green aluminum cans carried hope for the Charleston brewery trying to expand into other markets.

But now, something new is clouding Frothy Beard's 10-barrel system off Ashley River Road: Fear.

Since last month when President Donald Trump announced plans to impose a 25 percent tariff on imported steel and 10 percent on imported aluminum, South Carolina brewers have been scrambling to determine how the trade war will trickle into taprooms.

Frothy Beard co-owner Steve McCauley, who oversees packaging and distribution, said rumors in the industry are swirling. He's heard aluminum prices could increase anywhere from 1 penny to 5 cents per can from the tariffs that took effect March 23.

"There's going to be reckoning, but none of us knows what it's going to be yet," McCauley said. "The sad thing is that whatever it is, it's probably all going to get passed to the consumer."

The Beer Institute, which represents beer producers and importers, said the tariff on aluminum alone would cost the industry $347.7 million and could result in the loss of more than 20,000 jobs nationwide. 

South Carolina is home to nearly 65 breweries, according to a count from Brook Bristow, executive director of the S.C. Brewers Guild.

Those craft breweries poured an estimated $655 million into the state's economy, according to a 2016 economic impact assessment from the Brewers Association.

Every South Carolina brewery, whether it is on the verge of opening or in the middle of expanding, will be impacted by the tariffs, Bristow said.

"Everything that beer touches is steel. And on the other side of things, in South Carolina I'd say around 50 percent of our brewers package in aluminum cans," he said. 

Canning conundrum

Will McCameron, who operates Brewery 85 in Greenville, said he lucked out.

About a month before Trump announced his tariffs, McCameron's brewery ordered all the aluminium they needed for the coming year. That material will be used for their "crowlers" — an increasingly popular 32-ounce aluminium alternative to the all-glass "growler."

It's more affordable than glass, he said, and keeps light from getting to the beer inside.

Still, McCameron worries he may have to raise his prices.

"I hate kicking the can down the road. I'm not saying I won't, but I’m going to do my best to keep our beer prices where they are," he said. "We were fortunate to buy our bulk of cans before the market went out of whack, but there's no question that this is going to make things even worse."

Commerce Secretary Wilbur Ross disagrees that the beer industry will be as affected as South Carolina producers fear. In March he told Chuck Todd on NBC's "Meet the Press" the impact of the tariffs would be negligible.

"We're talking about a fraction of a penny on a can of beer," Ross said.

Bob Pease, president and CEO of the Brewers Association, scoffed at Ross' financial assessment. Pease told The Post and Courier that even a 1-cent increase per can would be problematic for most craft breweries.

"Let's say you buy a million cans, but the price of those cans goes up a penny. That's an unbudgeted $10,000 expense," Pease said.

"An unbudgeted $10,000 expense just for your raw material is big news — big bad news," he said. "It could be the difference between making payroll in a month and not being profitable."

Since last summer, Pease said the Brewers Association has been lobbying the Trump administration and lawmakers to push back against the tariffs after the Commerce Department began investigating whether steel and aluminum imports were a threat to national security. When the investigation concluded in early 2018 that they are a threat, Trump's tariff announcement soon followed.

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U.S. Rep. Tom Rice, R-Myrtle Beach, is one of two South Carolina members in the House Small Brewers Caucus, a pro-brewing collection of more than 226 members of Congress from 42 states. In a statement to The Post and Courier, Rice applauded the intent of the tariffs to punish China for flooding global markets with cheap steel and aluminum but acknowledged that craft breweries have become an unintended casualty of Trump's decree.

McCameron said he's concerned about America's standing on the global manufacturing stage.

"I'm not a Democrat or a Republican. I'm probably more of a libertarian and a centrist, but most of all I'm an American and I'm a brewer," he said. "Now with this thing, we've just pissed everybody off and the brewing industry is going to be highly affected; there's no way around it."

A steel scare

Every Saturday for the past five years, an auditor, an engineer and a banker from Rock Hill have gotten together to brew beer and play poker in a home garage. Their gathering was cemented by a hazelnut brown ale they made in a bucket.

"It was terrible beer but it was beer, and we knew we could make this thing work," said Ben Lee, a bearded 37-year-old banker who is a part of the trio of Winthrop University graduates. This summer they will open Slow Play Brewing across the street from the campus.

One week before Trump announced the tariffs, Lee said they put down a deposit for their stainless steel brewing system — an investment that accounted for almost 50 percent of their opening budget. He worried whether they would have to pay more to get the system shipped to South Carolina before their soft launch in July. His supplier confirmed the price would not change.

"That was my heartburn there," he said. "It's all about dollars and cents. You're starting up a very cash-intensive business. That's a big driver for any kind of scheduling and business opening. When you plan a business, you have many years of planning for financials and unexpected costs, but tariffs is not one that comes to the front of the mind."

Tariffs weren't on Chris Brown's mind either when Holy City Brewing announced its expansion into North Charleston. The company expects to create 15 jobs with their crosstown move to the former Public Works property at 1021 Aragon Ave.

Along with the expansion, Brown said Holy City is canning between 750 to 1,000 cases of beer a week.

So far Brown is not giving into the fermenting fears. Holy City's purchase of a new system includes Chinese steel but with tanks from Wisconsin that were purchased before the tariffs went into effect.

"You have to be smart from a business standpoint about who you're buying from," Brown said. "Right now we're just in a kind of wait-and-see mode."

Reach Caitlin Byrd at 843-937-5590 and follow her on Twitter @MaryCaitlinByrd.

Political Reporter

Caitlin Byrd is a political reporter at The Post and Courier and author of the Palmetto Politics newsletter. Before moving to Charleston in 2016, her byline appeared in the Asheville Citizen-Times. To date, Byrd has won 17 awards for her work.

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