American Keg Company is the only remaining U.S. manufacturer of stainless steel beer kegs. Despite competition from German and Chinese firms, American Keg has only used domestic steel. But now it’s being punished for this domestic sourcing as Donald Trump’s steel tariffs have forced the business to lay off a third of its workforce.

Since it began manufacturing kegs in 2015, the Pottstown, Pennsylvania-based American Keg has operated on a narrow margin. The 15.5-gallon keg is a staple in bars and fraternities, and the American-made...