Global Trade Tensions Threaten North Carolina’s Craft Brewing Industry, Expert Says

Key Takeaways

• Tariffs on imported steel and aluminum, the primary materials for packaging and equipment, are expected to lead to higher operating costs for craft breweries.
• Craft breweries might pass on those increased costs to consumers in the form of higher beer prices, potentially resulting in decreased demand and lower sales volume.
• Despite economic challenges, North Carolina’s craft brewing industry has demonstrated resilience through adaptation, collaboration and strong community support.

North Carolina’s craft brewing industry has experienced significant growth over the years, becoming a major economic driver and community asset.

But the industry, which supports more than 70,000 jobs and generates over $13 billion, now faces global trade tensions that could stifle sales.

In response to what it deemed “unfair trade practices and global excess capacity,” the Trump administration recently doubled tariffs on steel and aluminum imports.

A significant number of craft brewers in the United States use imported aluminum, primarily from Canada, to produce their canned products.

Similarly, most craft brewers in the U.S. rely on imported steel, predominantly from Europe and China, for kegs and brewing equipment and components. 

Economists generally agree that tariffs, which act as taxes on imported goods, are likely to be passed onto customers by domestic companies in the form of higher prices.

Ann Savage, a Tourism Extension associate at North Carolina State University, said increased prices “could keep people from purchasing craft beverages.”

Decreased demand for craft beverages could have significant consequences for the industry, including decreased sales and revenue. 

“Tariffs create an additional financial strain on these businesses.”

Smaller craft breweries are particularly vulnerable, according to Savage, who works with businesses and other community partners to promote sustainable tourism development.

Not only do these businesses often lack the financial resources to absorb the increased costs of tariffs, but many are already struggling with existing debt.

In North Carolina, for example, many smaller craft breweries are still paying back loans acquired in response to COVID-19 and Hurricane Helene.

“Tariffs create an additional financial strain on these businesses,” Savage said. 

She added that the challenges arising from tariffs could be worsened by a potential recession, creating an even more difficult economic situation for smaller breweries.

While there’s no widespread consensus on whether a recession will occur in the U.S. in 2025, some analysts have predicted a potential recession in the latter half of the year. 

“If we see a move toward a recession, which is still up for debate, these craft breweries will lose market share as people have less money to spend,” Savage said. 

A recession would also make it a particularly vulnerable time for craft breweries to raise prices, which could make it easier for consumers to forgo purchasing beer.

Brewing Success and Building Community

Craft breweries act as catalysts for economic growth and community development, extending their positive impact far beyond the simple act of selling beer.

In addition to creating jobs and generating tax revenue, craft breweries often support local farmers and businesses by using locally sourced ingredients. 

Many craft breweries also attract tourists through brewery tours and tasting rooms. This form of tourism is often referred to as craft beverage tourism or beer tourism.

“Breweries are attractions,” Savage said. “They often serve as a reason why people visit a community, even just for a day trip.”

North Carolina cities like Asheville, Durham, Raleigh and even Morganton have become premier destinations for craft beer enthusiasts across the country.

Asheville, for example, is known as “Beer City” due to its large number of breweries, some of which recently medaled in the 2025 U.S. Open Beer Championship.

The influx of visitors attracted to craft breweries not only supports the breweries but also other businesses as visitors often spend money on lodging, dining and transportation.

Beyond their contributions to local economies, craft breweries serve as vital community spaces that foster social connection and local identity.

Many craft breweries function as “third places,” or welcoming environments outside of home and work where people can gather, socialize and build relationships.

“Craft breweries have long been valued for their ability to build and foster social capital in communities,” Savage said, referring to a study published by her colleagues.

Savage added that craft breweries provide a number of other benefits to communities, including serving as places of refuge and organizing in the wake of natural disasters, fundraising for charities and even promoting local art.

Crafting Resilience in Uncertain Times

Industry analysts and brewing associations have expressed concern that heightened tariffs could increase costs for breweries, potentially leading to closures.

The industry has already been coping with the rising costs of ingredients and packaging, supply chain disruptions and shifting consumer preferences. 

Last year was the first time since 2005 that the number of breweries that closed exceeded the number of new breweries that opened nationwide. 

North Carolina saw a net loss of one brewery last year, with 24 new breweries opening and 25 closing, bringing the total number of breweries in the state to 410. 

Duck-Rabbit Craft Brewery, a fixture of North Carolina’s craft brewing industry for two decades, was among the latest to close after filing for bankruptcy.

Savage said breweries that integrate themselves in their communities are more likely to thrive, as this fosters a strong sense of connection and loyalty among their customers.

But she stressed that it’s difficult to accurately forecast how breweries will fare given how quickly social, political and economic changes are occurring in the U.S.

Historically, the craft brewing industry has successfully navigated a variety of difficult circumstances, from market fluctuations to rising costs. 

The increasing number of craft breweries has led to a highly competitive market, forcing brewers to find ways to differentiate themselves and attract consumers, for example.

“Craft brewers have been through difficult times before or hit setbacks and figured out how to work through it and create innovative solutions,” Savage said. 

She added that craft breweries also frequently collaborate to support each other — and their communities — through difficult times.

When Hurricane Helene devastated western North Carolina in September 2024, for example, the North Carolina Craft Brewers Guild led the Pouring for Our Neighbors campaign to raise funds for impacted breweries and communities.

The campaign raised over $250,000 for the recovery and rebuilding of western North Carolina. Funding now continues to be directed to the North Carolina Craft Brewers Foundation, which has distributed over $150,000 to impacted breweries.

“This campaign is just one example of how breweries have pulled together to build resilience, not only for their businesses but also their communities,” Savage said.