Collective Arts Considers U.S. Brewing After Tariffs Disrupt Nearly 20% of Its Business

The trade clash between the United States and Canada is putting new pressure on craft brewers on both sides of the border, raising packaging costs, slowing beer shipments and forcing some companies to rethink where they make and sell their products.

One of the companies feeling the strain is Collective Arts, a craft brewer in Hamilton, Ontario. Chief Executive Officer Matt Johnston said tariffs and alcohol boycotts tied to the dispute have pushed the company to reconsider how it serves the U.S. market, which accounted for nearly 20% of its business.

Johnston said one option is to move some production to the United States. Another is to redirect investment and effort toward markets where the company has a stronger base. The shift shows how a trade fight that began with government policy is now reshaping business decisions for smaller beverage makers that depend on stable cross-border commerce.

The pressure is not limited to sales. Brewers are also dealing with higher packaging costs linked to aluminum tariffs. The Brewers Association estimates that tariffs on aluminum could add as much as 8.2 cents to the cost of each can for consumers. For a sector that sells large volumes in canned formats and often operates with tight margins, that kind of increase can affect pricing, distribution and product planning.

The effect could reach well beyond one brewery. For the beverage industry, especially craft beer, the dispute threatens access to an important neighboring market while also making basic inputs more expensive. Brewers that built supply chains around easy movement between the U.S. and Canada can face added uncertainty in both sourcing and sales if tariffs remain in place and consumer boycotts continue.

The U.S. and Canada have long been natural trading partners for brewers because of their shared border and close distribution networks. Smaller producers, in particular, have used that proximity to reach new customers without building the kind of far-flung export systems that larger global beer companies can afford. When trade barriers rise, those smaller companies often have fewer ways to absorb the cost.

That dynamic appears to be driving the response from Collective Arts. Rather than rely on the previous flow of beer into the U.S., the company is weighing whether it needs a production footprint inside the market to keep serving American customers. For a brewery whose identity is tied to craft production and brand building, changing where beer is made is a significant step.

The dispute is also colliding with consumer behavior. Johnston said alcohol boycotts have become part of the problem, suggesting the trade conflict is not only changing official costs at the border but also influencing demand. That can make planning harder for brewers, because they may have to respond to shifting sentiment in addition to higher tariffs and more expensive materials.

For U.S. brewers, the same forces can work in reverse. If Canadian buyers pull back from American products or if retaliatory trade measures make those products harder to sell, breweries that counted on Canadian demand may have to adjust volumes, pricing or market strategy. Companies that rely on aluminum cans may also face a direct hit from higher input costs even before their beer reaches store shelves.

The result is a squeeze on several parts of the business at once: market access, packaging, investment decisions and supply chain planning. In craft beer, where many producers are still regional in scale, those pressures can be hard to separate. A brewer may be forced to think about tariffs when buying cans, about politics when selling abroad, and about plant location when deciding how to keep serving customers across the border.

Collective Arts’ deliberations show how quickly that pressure can turn into concrete change. What had been a cross-border growth market for the company is now prompting questions about whether production should move, where investment should go and how much risk a brewer can carry when trade policy and consumer reaction are both in flux.