The price of your favorite beer may soon be going up.

The Trump administration’s newly imposed tariffs on imported aluminum and steel have boosted production costs for U.S. breweries. Some will be forced to pass those costs along to customers, an industry expert said, while others will likely cut their staffing.

A massive tax, big job losses

Jim McGreevy, CEO for the Beer Institute, a trade association that represents brewers throughout the nation, said the tariffs amount to a yearly $347 million tax on the U.S. beer industry.

“There are 6,000 individual brewers operating in this country today and each of them are going to have to decide what to do,” he said. “They can either eat the cost — or raise prices. We analyzed the overall economic impact and we estimate that as many as 20,000 jobs could also be lost because of this.”

The U.S. imposed tariffs of 25 percent on steel and 10 percent on aluminum on China and other countries in March. The same tariffs were imposed on Canada, Mexico and the European Union in June. The hikes are significant in light of the 36 billion aluminum cans and aluminum bottles U.S. brewers purchased in 2017.

Nearly all aluminum is imported

“Ninety percent of the aluminum we use is imported and 45 percent of it comes from Canada,” McGreevy said. “We were lucky enough to get a break on the federal excise tax on beer in a reform bill last year. That amounted to $150 million in tax breaks for the brewers in this country … but now they’re dealing with these tariffs.”

Anheuser-Busch — which operates 21 breweries in 15 states, including a large facility in Van Nuys — issued a statement in March when President Trump announced the proposed tariffs.

“Because beer is increasingly packaged in aluminum cans, the proposed 10 percent tariff on aluminum will likely cost U.S. brewers millions of dollars, making it more difficult to grow and further invest in our U.S. operations,” the company said.

MillerCoors expressed a similar sentiment, saying the tariffs “will cause aluminum prices to rise” and “likely to lead to job losses across the beer industry.”

The Midwest Transaction Premium

The industry is also grappling with the Midwest Transaction Premium. Created by metal producers years ago, it’s essentially a shipping and handling fee to cover the logistical costs of moving metal into and throughout North America. But McGreevy said it has become a tool to speculate and artificially inflate the price paid for aluminum by businesses and consumers.

“The Midwest Transaction Premium increased 135 percent between Jan. 1 and July 9 of this year,” he said. “There has never been real transparancy about how it is set. It’s determined by aluminum traders, not users. Our view is that they are seizing on the climate with the aluminum and steel tariffs right now to increase it.”

A call for an investigation

On Wednesday, 32 members of Congress, including Rep. Grace Napolitano, D-El Monte, sent a letter to U.S. Attorney General Jeff Sessions questioning “possible irregularities” in the aluminum market that appear to have inflated prices.

“The MWTP has recently undergone sharp price increases, despite the fact that logistical costs of sourcing metal from around the world have not moved significantly,” the letter said. The lawmakers said they are concerned that prices are being artificially inflated to enrich only specific producers, traders and other market participants.

The letter urges the Department of Justice’s antitrust division to examine the issues.

Petaluma-based Lagunitas Brewing Co., which is working to open a brewery in Azusa, is already feeling the impacts of the tariffs.

“They are coming at a time when aluminum prices were already rising and that only accelerated the trend,” said Neil Nersesian, the company’s senior vice president of operations. “The full impacts the tariffs have yet to be felt.”