A D.C. brewery is planning for the possibility of increased costs as a result of Canada’s new tariffs on American goods, though it may be months before the exact impact becomes clear.
Brandon Skall, CEO and co-founder of D.C. Brau Brewing Company, said it’s unlikely the new tariffs will reach the business at a 50% level, because several companies are involved before the cans reach them. However, Skall said, they’re still bracing for a 10% to 25% increase in the cost of their aluminum.
This week, Canada announced a series of retaliatory tariffs on American goods, and the list includes steel, dairy products and appliances. The biggest share of new tariffs would impact steel and aluminum, The Associated Press reported. The tariffs are scheduled to take effect Sept. 8.
“We’re trying not to jump to any conclusions,” Skall told WTOP, “but it is definitely a concern.”
D.C. Brau, based in Northeast, uses different types of aluminum. One is used for the lids of beer cans, and Skall said he’d expect a 10% hike in price for those. For the actual 12- or 16-ounce cans, “I would expect somewhere between 15% and 25% increase, which could be anywhere from $40,000 to $70,000 annually. Obviously those aren’t small numbers, and it’s something that we will have to plan for. But it’s hard to plan when we don’t know exactly what the effect is going to be,” Skall said.
It’s unlikely for customers to feel the impact of the tariffs right away, Skall said, because the company has annual price increases that get planned with its distributor. That’s the chance, he said, to adjust pricing for the upcoming year.
“We would have to wait until one of those price increases hits in order to adjust for any additional cost in aluminum,” Skall said. “However, at a time when craft beer is down nationally and locally, it’s hard to justify taking a price increase.”
It’ll take about 60 days for the impact of the tariffs to become clear, Skall said. D.C. Brau still has inventory to work with over that period, but “we’ll be paying attention to any price increases that are passed along from our suppliers during that time.”
To plan for the coming months, Skall said there’s a focus on putting together several speculative forecasts and analyzing them against the market.
“We’re always trying to keep our product as affordable as possible,” Skall said. “However, it’s hard to predict, especially when you’ve got wild factors like this that can come in at any moment.”
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