New Steel and Aluminum Tariffs: Challenges for Small Businesses
- Schulz Trade Law
- 6 days ago
- 5 min read
Updated: 2 days ago
New Steel and Aluminum Tariffs: Challenges for Small Businesses
On June 3, 2025, KXAS-TV NBC 5 in Dallas-Fort Worth aired a segment on the impending 50% tariffs on imported steel and aluminum, set to take effect the following day. Reporter Vince Sims explored how these tariffs are affecting local businesses, featuring insights from Brandon Pitzer, co-founder of False Idol Brewing, and Michelle Schulz, an attorney specializing in international trade at Schulz Trade Law. The discussion highlighted the challenges small businesses face amid tariff uncertainties and potential legal battles. This blog post expands on the segment, delving into the implications for businesses, the global trade context, and strategies for adaptation.
NBC 5 / KXAS-TV
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Michelle Schulz at 1:09
Steel and Aluminum Tariffs and Their Immediate Impact
The new tariffs, enacted under Section 232, target imported steel and aluminum, critical materials used across industries. At Falls Idol Brewing in North Richland Hills, aluminum cans are essential for packaging their beer, making them directly susceptible to the 50% tariff increase. As Vince Sims reported, small businesses like Falls Idol are bracing for cost hikes that could disrupt their operations.
Brandon Pitzer, co-founder of False Idol Brewing, noted that a 60-day notice period from suppliers provides a temporary buffer before price increases hit. However, as a small business already facing higher costs than larger competitors, the looming tariffs are a significant concern. Pitzer emphasized the need for flexibility, stating,
“You’ve got to navigate it and be flexible, especially when you’re a small producer.” This reflects the broader challenge for small businesses, which often lack the resources to absorb sudden cost increases.
Legal and Economic Uncertainties around Tariffs
The tariffs are not only an economic issue but also a legal one. Michelle Schulz highlighted that the legality of these tariffs is under scrutiny, with potential challenges that could reach the Supreme Court. This uncertainty complicates planning for businesses. Schulz advised agility, stating, “You have to be ready to pivot, but maybe expect the worst, plan for the best, or vice versa.” Her comments underscore the precarious position of businesses navigating both regulatory changes and potential litigation.
For small producers like False Idol Brewing, the unpredictability of price increases makes budgeting challenging. Pitzer described it as a “guessing game,” expressing hope that negotiations between the U.S. and trading partners, such as China, might resolve the issue before the tariffs fully impact costs. The NBC 5 segment noted that President Trump and China’s President were expected to discuss tariffs that week, hinting at the possibility of a diplomatic resolution.
Global Trade Context
The steel and aluminum tariffs are part of a broader U.S. trade strategy aimed at protecting domestic industries and addressing trade imbalances. Initiated under Section 232, which allows tariffs for national security reasons, these measures follow a pattern of escalating trade tensions with key partners like China, Canada, and the European Union. The White House’s focus on tariffs reflects a push to bolster U.S. manufacturing, but it also risks retaliatory measures from other countries, which could further complicate global supply chains.
For small businesses, the global context amplifies local challenges. Imported steel and aluminum have historically been more affordable, enabling companies like Falls Idol Brewing to keep costs low. With tariffs increasing the price of these materials, businesses may turn to domestic suppliers, but as Schulz noted in a related WBAP Radio interview on June 5, 2025, domestic alternatives often come at a premium. This shift could erode the competitive edge of U.S. businesses in global markets, particularly for small firms with limited pricing power.
Retaliatory tariffs from trading partners could also impact U.S. exports, affecting industries like agriculture and craft brewing, which rely on international markets. The uncertainty surrounding trade negotiations adds another layer of complexity, as businesses must prepare for multiple scenarios while awaiting outcomes.
Long-Term Effects on Small Businesses
Beyond immediate cost increases, the tariffs could have lasting effects on small businesses. Higher input costs may force companies to raise prices, potentially reducing consumer demand for products like craft beer. Alternatively, businesses may absorb costs to maintain affordability, squeezing profit margins and limiting growth opportunities. For industries reliant on aluminum and steel, such as food and beverage packaging, construction, and automotive, the tariffs could reshape supply chains and competitive dynamics.
The legal battles over the tariffs, as Schulz mentioned, could prolong uncertainty. If courts rule against the tariffs or modify their scope, businesses may face additional adjustments. Conversely, if the tariffs remain in place, companies may need to invest in long-term strategies, such as sourcing from tariff-exempt countries or adopting alternative materials like plastic or glass, though these options carry their own costs and logistical challenges.
For consumers, the tariffs are likely to translate into higher prices for everyday goods, from canned beverages to vehicles. This could dampen spending, particularly in discretionary categories like craft beer, further pressuring small businesses. The cumulative effect of these changes could slow economic growth in sectors heavily reliant on imported materials.
Strategies for Small Businesses
To navigate the challenges posed by the tariffs, small businesses can adopt several strategies:
Diversify Suppliers: Explore sourcing from countries not subject to the tariffs, such as those with free trade agreements with the U.S. This requires careful vetting to ensure quality and compliance.
Optimize Inventory Management: Build strategic stockpiles of critical materials before price increases take effect, balancing storage costs with savings.
Engage Trade Experts: Work with firms like Schulz Trade Law to ensure compliance with customs regulations and explore exemptions or duty relief programs.
Adjust Pricing Models: Gradually pass on cost increases to consumers while communicating value to maintain loyalty, or explore cost-cutting in other areas to offset tariff impacts.
Monitor Trade Developments: Stay informed about trade negotiations and legal challenges, as outcomes could alter tariff policies. Resources like NBC 5 and trade law blogs provide valuable updates.
Pitzer’s approach at False Idol Brewing—continuing production while preparing for price changes—reflects the resilience required in this environment. However, proactive planning and expert guidance will be critical for long-term success.
Adapting to a Shifting Trade Landscape
The 50% tariffs on steel and aluminum mark a pivotal moment for U.S. businesses, particularly small enterprises like Falls Idol Brewing. As highlighted in the NBC 5 newscast, the combination of cost increases, legal uncertainties, and global trade tensions creates a complex challenge. Michelle Schulz’s call for agility and preparedness resonates as businesses brace for potential disruptions.
For consumers, the tariffs may mean higher prices, underscoring the interconnectedness of global trade and local economies. As trade negotiations and legal battles unfold, small businesses must leverage flexibility, strategic planning, and expert support to thrive. Firms like Schulz Trade Law will play a vital role in guiding companies through this evolving landscape.
For more insights on managing trade challenges, visit Schulz Trade Law or watch KXAS-TV NBC 5 for the latest updates on U.S. trade policy.
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Reporter: Vince Sims
If your business is affected by new or existing tariffs, or you need strategic guidance on international trade compliance, contact Schulz Trade Law today.
Our team of seasoned trade lawyers can help you navigate the shifting legal landscape with agility and confidence.
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