The Transylvania Times -

Locals Weigh Tariff Impact -Brevard NC

 

August 9, 2018



Some local manufacturers, such as Oskar Blues Brewery, say they are taking a financial hit because of the recent import tariffs imposed by the Trump administration, while others aren’t sure what the long-term impact will be.

The import tariffs placed on steel and aluminum from Europe, Canada and Mexico went into effect June 1. The steel imports are taxed at 25 percent and aluminum at 10 percent.

For Oskar Blues, the aluminum hike means their yearly production costs will increase by about $400,000, according to Aaron Baker, the company’s marketing director.

“Seventy percent of our beer is packaged into cans, with the other 30 percent being put into kegs,” he said. “We don’t use glass bottles at all. Craft beer is already a very capital-intensive industry. To instantly up our cost of goods sold, due to an aluminum tariff, will be at the expense of investing and growing jobs in our communities. We will do everything we can to avoid increasing prices for Oskar Blues beer drinkers.”

Baker said based on the numbers they are hearing, the brewery could see a cost increase of $0.20 to $0.24 per case of beer, which, he said, would equate to the additional $400,000 annually.

“I’m not a global economist or politician, but this is the impact we are anticipating to our craft brewery,” he said. “The Brewers Association is our representative organization, and we leave all official positions to them. We did see a small impact from the steel tariffs earlier this year. The expansion of the patio area of our taproom and the cold storage for beer production was delayed due to a run on steel purchasing caused by the implementation of steel tariffs. Delivery of the steel building materials was delayed several weeks.”

At Brevard Brewing Co., owner Kyle Williams said he was lucky that he bought enough aluminum cans to last him a year before the tariffs were enforced, but that he sources his cans from the same company, Ball Corporation, that Oskar Blues uses. Williams said that if the price of aluminum goes up, then the price of beer would go up.

Williams said trade barriers and tariffs are bad ideas.

“It’s anti-free trade,” he said. “It’s anti-capitalism. I can’t believe Republicans are falling for this. It’s the least Republican thing they can do. It’s bad for everybody. It’s bad for Americans, our economy, our trading partners and the global economy. It’s inefficient, and at the end of the day trade barriers and tariffs make the economy less efficient, and the economy thrives on efficiency. That’s as simple as it gets.”

Outside of the craft beer industry, Gary Castevens, with Tucker Creek Metal Fabrications, has been in the metal business in Transylvania County for 28 years, filling orders for many different customers over that time.

Currently, Castevens and his four employees are making panels and shells for medical supply companies. In general, he is in favor of the tariffs.

“I think, overall, it will be effective and it will give us a better balance of trade,” he said.

Castevens buys his materials from American sources. He said he had to increase his pricing in some cases, but, at this point, it hasn’t hurt his business. He does attribute the pricing increase to the tariffs. He said the sales representative from his material distributor, Ryerson Distributing in Greenville, S.C., told him he didn’t know about the long-term impact.

“We have had some price increases, and we have increased our price to the customer,” Castevens said. “I think the general conversation is that it will settle itself down and it will probably be OK. We’re passing it on to the customer. We were reluctant to do that, and no one knows what’s going to happen.”

In the outdoor recreation/manufacturing world, Ryan Kennedy, operations manager at SylvanSport, said he expects their business to be impacted. Kennedy said that for the past two-and-a-half years metal prices have risen, which has impacted them more so than the recent tariffs.

“We do source a decent amount of our custom aluminum extrusions out of Canada,” he said. “When all this went down, I wasn’t as worried because the discussion was around China, Asia and Canada, which has potentially bigger impacts. The reality of it is the billets for those metals are coming from all over the world to suppliers to here in the U.S., so you probably won’t see as much impact if you’re sourcing directly from Asia, but you’re still likely to see some level of price increase.”

Kennedy said there is still a lot of uncertainty in terms of how it will impact SylvanSport’s business, and that one of their aluminum suppliers contacted them because the suppliers are worried about potential – but still uncertain – impacts.

“They’re not exactly sure what that will look like,” he said.

 
 

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