On Tuesday, President Donald Trump revealed his latest tariffs, and today he walked them back, instituting a 90-day pause. The move comes on the heels of a 10% baseline tariff on almost all U.S. imports that went into effect on Saturday.
The new, higher rates went into effect today including a 34% tariff on China, 20% on the European Union and 24% on Japan, according to NPR.
The tariffs, which have effects beyond the global stage, could drive prices for raw materials like aluminum and products like steel machinery higher. In Western North Carolina, popular businesses like the nearly 100 breweries in the region, could feel the pinch.
Asheville’s Devil’s Foot Beverage Company relies on some imports to make its sparkling waters, cocktail mixers, and non-alcoholic drinks.
BPR’s Jose Sandoval spoke with Ben Colvin, president and founder of Devil's Foot Beverage Company, about how the tariffs could affect his business and WNC.
The conversation, edited for clarity and brevity, is below.
SANDOVAL: Tell us first what Devil’s Foot makes so we can understand how these tariffs might affect your business.
COLVIN: Weeks ago, we were already getting emails from vendors preparing us, getting us already for starting with 11% increases across the board of all packaging, aluminum hands lids, and paperboard packaging. We estimate our company to lease over $20,000 of unexpected expenses this year that were never budgeted and were never in plans. And, we bring in on the front end of supply, not just aluminum, but the paperboard, which a lot of that is coming from companies that contract out of Canada as well.
But we also bring in ingredients. We work with local regional farmers for a ton of fruits, stone fruits, berries, those kinds of things. But a lot of our products require that sort of citrus base, so we bring in organic fruits, lemons and limes.
We would love everything to be American made. We don't grow lemons in North Carolina. The market can really fluctuate when you have a late frost or an early frost in Florida or California has some devastating crop harvest.
Over the last couple years we have built some really great commodity contracts with organic farms and brokers coming from Mexico. We have to only bring in organic fruit so it sort of limits our scope of what we do, but to hold our values, we'll take on that as a cost to bring in that quality of the fruit.
So it's taken a couple years to build that commodity contract in place, and keep our citrus fruit prices stable so we don't see massive fluctuations depending on the demand for lemons and limes in the summer. This kind of thing is a massive disruption from that. We're already seeing a pretty great increase in those kinds of costs.
SANDOVAL: Other beverage makers in the area have spoken out about this, right?
COLVIN: Not just beverage makers, but food producers, consumer packaged products, goods that have become a rising market, particularly in North Carolina.
New businesses are now saying, “Hold on, I can't go buy that new brew house. No, I can't expand the new tank.”
All that steel is going up in costs, it's not budgeted. We don't have the capital for that kind of thing. It's not an isolated injury that anyone's feeling. This is a very community-wide tax essentially that's being placed upon everybody from the immediate producer all the way to the consumer and beyond.
SANDOVAL: And speaking of the consumer, what is the cost to the consumer? Do you expect to have to raise prices on beverages or just absorb the price increase?
COLVIN: We're all just gonna have to absorb a lot of this price increase. Just simply because we price our products as best you can within the market. You can't fall too out of line with what the consumer wants to pay for a six pack of beer.
Larger corporations that have a lot more leverage or buying power might not see as much of a hit as a small business. At some point we're all gonna have to pass it on to the consumer, but in the short term, it's just gonna have to be an absorbed expense on small business that essentially is gonna restrict our abilities to grow, hire and support our communities.
SANDOVAL: This is all in the immediate, but what about the longer term effects? Are you concerned about long-term sustainability with these tariffs?
COLVIN: Yeah, 100%. You start to hear from people outside of the US that we work with, and you start to hear concern of how people can have long-term trust and faith in the United States economy. Small business is the backbone of the American economy. We can't just afford to lose our restaurants, cafes, independent groceries and our producers, but we can't just fall back on major corporations in the long term. We're just gonna feel a lot of this problem, and it's gonna have to be some time spent to rebuild trust.
Editor's note: This story updated to reflect most recent changes in tariff policy.
