NORFOLK Va. (WVEC) -- New taxes on metals, signed into law by President Trump, go into effect this week.
Not only will they hike-up prices for metal distributors in Hampton Roads, it could make locally made alcoholic beverages more expensive.
Steel distributors said there's a nationwide shortage of steel mills making importing steel and aluminum a necessity for any product, including beer.
Smartmouth Brewery in Norfolk is one of the breweries impacted by the tariffs.
Porter Hardy is the president of Smartmouth Brewery, a craft brewery in Chelsea.
"Well nobody wants their beer prices to go up,” said Hardy. "All of our beer goes into either kegs or cans right. So, all of those are either steel or aluminum. Right now the uncertainty is the hardest thing."
President Trump's proposed 25 percent tariff on steel and 10 percent tariff on aluminum will affect all of their sales said, Hardy.
"For us, it's not a good thing," said Hardy.
From the steel containers from Canada used to ferment brews to the kegs used to ship and sell the beer, all of it uses steel and aluminum imported internationally even if it’s bought in the U.S.
Hardy said a tariff would increase the cost of creating his products. For example, Hardy said one can of aluminum cost just about $.10, but for local breweries who sell their beer. The tariff could cost out to an extra $3,000 just for three 300,000 cans,
The brewery president said he will absorb the cost of the tariffs if needed.
"So that means either we invest less in our employees or we invest in less in our equipment or we can't expand because that cost has to come out of somewhere," said Hardy.
Absorbing the extra expense also means trying to avoid raising the prices for Smartmouth beer to more than $9.99 for a six-pack.
The GOP passed a "Craft Beverage Modernization and Tax Reform Act" last year as part of the tax reform bill.
The new tax code gives American breweries and beer importers a two-year federal excise tax relief. Hardy said half of that money will now go towards the impacts of the proposed tariffs.