Oh, the iron-y. The Trump Administration’s 25% tariff on imported steel is denting business at American Keg Co., a factory that uses only U.S. steel.
American Keg CEO Paul Czachor explains that the tariff hurts for two reasons:
1. The tariff only applies to raw steel, not finished steel products — such as Chinese beer kegs.
2. The tariff has dried up steel imports, causing demand — and prices — to rise for U.S. steel.
Both developments are testing the mettle of American Keg, the only U.S. keg maker relying entirely on domestic steel. Not only is the Pottstown, Pa., factory paying more for raw materials, it’s losing ground to Chinese competitors.
“We have a lot of patriotic customers who wanted to buy an all-American product,” said Czachor, noting that many of those patriots run California breweries. “But it’s a little harder for them to swallow now. We’ve seen our business tail off significantly.”
Before the tariffs, American Keg’s half keg — a 15.5-gallon container — sold for about $105, $10 more than the Chinese import. “Now we’re talking about $115 or $118 for a half-keg,” Czachor said, “and the import is still $95.”
Czachor, who recently laid off one-third of his 30 employees, was in Washington last week. His message: slap tariffs on Chinese kegs.
“This isn’t because we’re an inefficient company looking for a bailout,” he said this week.”We would put our product and quality against anyone in the world. We just want a level playing field.”
Read more from Peter Rowe's beer column here.