The Trump administration has announced a significant economic policy shift, implementing a 25% tariff on all imported canned beer and empty aluminum cans, effective Friday. This decision, revealed in a notice from the Department of Commerce, marks an expansion of existing U.S. aluminum tariffs and comes just ahead of President Donald Trump's anticipated announcement of extensive new levies on imported goods during a Rose Garden event scheduled for 4 p.m. ET.
Industry analysts predict that the newly imposed tariffs on canned beer imports will have the most pronounced impact on Constellation Brands. This beverage giant imports all of its beer from Mexico, including popular brands like Modelo and Corona. Notably, beer accounted for a staggering 82% of Constellation's sales in the last quarter, making the company particularly vulnerable to these tariff changes.
Following the announcement, Constellation's shares experienced a slight dip of less than 1% in afternoon trading on Wednesday. However, concerns surrounding tariffs have been a persistent issue for the stock, which has seen a 22% decline since Trump's election in November. The updated notice regarding aluminum tariffs specifically excludes levies on imported beer packaged in glass bottles, maintaining a focus on aluminum products.
According to the Beer Institute, aluminum cans represented 64.1% of beer distribution in 2023, significantly outpacing the 26.9% share held by glass bottles. This trend highlights a notable shift in consumer preferences, as canned beer continues to gain market share over its bottled counterparts. Breweries favor cans due to their lighter weight, which facilitates easier production and transportation, ultimately leading to lower prices for consumers.
The United States primarily sources its aluminum from Canada, with China and Mexico also being significant exporters of aluminum to the U.S. These countries have been central to Trump's trade policies, reflecting broader tensions in international trade relations. As the administration continues to adjust tariffs, the implications for the beer industry and related sectors remain a critical point of discussion among industry experts.
