Middle Tennessee Businesses Adapt to New Tariffs on Steel and Aluminum

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News Summary

Middle Tennessee businesses are facing challenges and opportunities due to a 25% tariff on steel and aluminum imports. While companies like Bennett Industries pivot to local sources, others struggle with rising costs impacting profitability. Distilleries, breweries, and various industries dependent on these metals are bracing for price increases, affecting everything from whiskey exports to beer production. The local economy shows resilience as businesses adapt to this new landscape amidst uncertainty.

Middle Tennessee Businesses Adapt to New Tariffs on Steel and Aluminum

In Nashville, the echoes of change are reverberating through the streets, as the recent imposition of a 25% tariff on all steel and aluminum imports has left many local businesses adjusting their sails. These new tariffs, announced by President Donald Trump and effective as of March 2025, are shaking things up, particularly for those who export and import this essential metal across the Canadian border.

A Silver Lining for Bennett Industries

Matthew Billings, the owner of Bennett Industries of Tennessee, shares a different perspective amidst the upheaval. While the tariffs come with their challenges, his business is actually witnessing an increase in opportunities. In response to the tariffs, Billings has decided to source materials from American steel companies. This move has not only allowed him to sidestep the hefty tariffs but also led to a surge in his operations. The company has adopted a more aggressive business model, operating seven days a week and adding extra shifts. This shift in strategy has led to the hiring of more employees and an uptick in equipment purchases. Although steel prices have edged upwards, Billings sees this as a beneficial change for the long-term viability of his business.

Local Companies Struggle with Rising Costs

Meanwhile, many other businesses in the area are feeling the pinch. Local companies are reporting higher costs attributed to price increases from American steel and aluminum manufacturers. A recent outreach effort revealed that more than two dozen metal fabricators and suppliers were hesitant to speak out, fearing potential fallout from their comments about the situation.

Difficult Times for Distilleries

The impact of tariffs isn’t just limited to steel and aluminum; Tennessee’s distilleries are also grappling with the consequences. Whiskey exports, a cornerstone of the state’s economy, are particularly vulnerable. In a retaliatory response, Canada has announced tariffs affecting more than $20 billion worth of U.S. goods, including whiskey. Not to be left out, the European Union has its own set of retaliatory tariffs, targeting around $28 billion of American products like beef and motorcycles. This international tussle could have dire repercussions for well-known whiskey brands such as George Dickel and Jack Daniels, while smaller distilleries are bracing for hikes in prices for essential materials like glass, as tariffs on other countries exacerbate their operational costs.

Brewery Budgets Getting Tight

At TailGate Brewery in Nashville, the tariffs on aluminum are already creating challenges. The prices for aluminum cans have risen sharply, putting pressure on brewery budgets. The Director of Brewing Operations expressed that while they will attempt to absorb some of the cost increases, the prospect of passing on higher prices to consumers looms larger than ever. With profit margins being razor-thin in the industry, it becomes a balancing act—how much can they raise prices before they risk losing their beloved customers?

Industry Concerns Across the Board

The ripple effects of these tariffs are expected to extend far beyond beer and whiskey; industries dependent on steel and aluminum, such as construction and automotive, are likely to feel the strain. The Brewers Association has voiced significant concerns about the potential burden these tariffs could impose on brewers and consumers alike, with the possibility of increased craft beer prices casting a shadow over an otherwise vibrant industry.

As Middle Tennessee businesses navigate this evolving landscape, one thing is clear: the local economy is resilient. While the challenges posed by the tariffs are undeniable, there remain opportunities for those willing to adapt and innovate. The coming months will be a test of strength for many, as stakeholders from various industries work to find a way through these economic changes.

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Author: HERE Knoxville

HERE Knoxville

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