BETHLEHEM, Pa. — Gov. Josh Shapiro stopped by a beloved Lehigh Valley brewery Wednesday to voice his support for small Pennsylvania businesses in the midst of potential price hikes brought on by tariffs.
Shapiro, joined by local politicians and business owners, came out to Fegley Brew Works in Bethlehem to highlight the impact tariffs will have on everyone in the commonwealth, including those in the craft brewing industry.
President Donald Trump is set to announce his tariffs on Wednesday afternoon, with the intent they go into effect by May 2025.
"You do not need a degree of economics in order to make sense of what is about to occur: A tariff is a tax, and it increases the price for consumers and for businesses.”Gov. Josh Shapiro
According to Shapiro, craft breweries contribute $5.4 billion to the commonwealth each year, with about 530 of the operations generating 3 million barrels of beer each year.
“I'm mindful that we are here today in Bethlehem on the same day that the federal government is about to impose massive tariffs across the board," Shapiro said.
"And I'm worried about the impacts on Pennsylvania businesses once those tariffs hit and other countries then hit us back with retaliatory tariffs.
“Listen, this is not hard to understand. You do not need a degree of economics in order to make sense of what is about to occur: A tariff is a tax, and it increases the price for consumers and for businesses.”
'Trying to make life easier'
The governor used aluminum imports — a vital part of the craft brewery scene, with 75% of craft beer being sold in aluminum cans — as an example of the impact.
He said the already-implemented aluminum tariff will lead to high costs for businesses and consumers, as per the U.S. Chamber of Commerce.
“But here in Pennsylvania, I want you to know that I give a damn about our small businesses, and I give a damn about our main streets, and I'm trying, together with these lawmakers..."Gov. Josh Shapiro
“And it's not just the can that that beer comes in," Shapiro said. "It's how the beer itself is made and brewed, the vats that are used in order to process that beer well, they're made of steel.
"Steel is now subject to additional tariffs, additional taxes.
“Many of our small craft brewers source their malted barley from Canada, and the cost of that malt barley has gone up because of these tariffs.
"And it's made it harder to source it domestically, primarily because the big purchasers, the big beer companies, gather most of it.
"But also because of the market forces that are being changed from this tariff war that the president is putting in place.”
The governor had no direct plan to address the tariffs at the federal level, which fall outside his control.
But he reassured the public that the commonwealth would do anything it can to help support the small businesses of the Lehigh Valley and the rest of Pennsylvania.
“But here in Pennsylvania, I want you to know that I give a damn about our small businesses, and I give a damn about our main streets," the governor said.
"And I'm trying, together with these lawmakers, to make life easier for our small businesses, to make life easier and more profitable for those businesses that line our main streets.”
Part of the solution would involve continued investment in Main Streets and small businesses via tax cuts for owners, he said.
Shapiro said he wished Trump “wasn’t working against as recklessly as he is.”
'We're a small business'
Fegley's owner Jeff Fegley said the ramifications of the tariffs could hit hard and fast, especially for small operations such as his own in Bethlehem.
"We have ingredients that come from Canada and other things that are sourced that potentially are going to be increasing overnight," Fegley said.
"And you know, I'm glad that the governor is here to speak about that, because I know it concerns him."
Sherman Street Beer Company’s Beau Baden spoke about how a small operation such as his own could easily be impacted, along with his customers.
“We're a small business where profit margins are very tiny, you know, in the 5- to 10-percent range. It's very small,” Baden said.
“So we have to figure if we have to pass on the consumers who are also price sensitive. Right now, it's a big, big, difficult decision to make.
"And you know, we want to be in business for as long as possible and keep growing and expanding. If we have to find more tanks, there's obviously a cost on to that.”
'Follow the American dream'
Bethlehem Mayor William Reynolds emphasized the importance small businesses have played in the city’s growth.
Reynolds pointed to the addition of about 14,000 jobs in the area since 2008, driven by small businesses that got support from legislators, and how they have become the backbone of the area’s economy.
“We work with our private sector, we work with our state and federal leaders to be able to drive investment and let people follow the American dream and accomplish those goals," Reynolds said.
"Like the Fegleys, like Beau and so many others. So we stand here concerned about what's going to happen at four o'clock and later on today.”
Reynolds said he knew the governor and local legislators would “have our back.”
State Sen. Lisa Boscola was up front about the fact that “the governor and I cannot stop Washington from imposing these horrible tariffs.”
Boscola said she was leaving it in the hands of state and local politicians to help their small businesses weather the storm.
“However, like so many of the restaurants and taverns, craft breweries are still attempting to recover from the pandemic, and now we're adding tariffs on top," she said.
"I don't know how you're going to handle this, but I can tell you, the governor and I and our legislature are here to try to figure out how we're going to help you during this turmoil."
'We must stay determined'
State Rep. Steve Samuelson spoke out on Trump’s tariffs, saying the seemingly flippant decision to impose the tariffs would crush growing businesses.
But state and local support could help to curtail some of those impediments, he said, highlighting Shapiro’s $500 million investment in small businesses.
“We're going to also try to keep that going in this budget, next budget, and the one after, and also targeted investments like the $500,000 for marketing and sales for craft breweries," Samuelson said.
"We have a very successful craft brewery industry all across Pennsylvania. Let's continue to support that at the state level, and let's speak up and speak out against these terrible policies in Washington that are out to hurt small business.”
State Rep. Jeanne McNeill said what the president is doing “is hurting all of us,” and the long-term effects could be even worse.
“However, we must stay determined and continue our efforts to reduce the effects of these tariffs on small businesses like Fegley’s and Hawk Mountain Brewery and so many more,” McNeill said.
“We must continue to encourage our federal policy makers to consider the impact that is having on our area and so much more.”
