Fears of an imminent U.S.-China trade war have shaken up a number of sectors. The beer industry too hasn’t been spared. President Donald Trump’s imposition of a 10% tariff on imported aluminum from China is likely to have a devastating effect on the U.S. beer industry. Given that most of the beer produced in the United States today is packaged in cans, aluminum tariffs will only make things difficult for the country’s beer industry.

The tariffs certainly aren’t a good sign at a time when the U.S. beer industry is already witnessing a decline in domestic beer sales due to the changing preferences of consumers. Amid all these developments, the only good news is that U.S. craft beer exports rose in 2017.

And, yes, most of the exports were to Canada, the Asia-Pacific region (excluding Japan), the U.K. and Western Europe. That said, the beer industry stands a critical juncture, where higher exports are being cheered but lower domestic sales and aluminum tariffs are denting the confidence of brewers. Let’s look at each of the good, the bad and the ugly sides of the U.S. beer industry in this tumultuous time.

The Good: Craft Beer Export Rise  

International distribution of craft beer continued to increase in 2017, with U.S. export volumes rising 3.6% to $125.4 million, according to The Brewers Association (BA). Canada remains the biggest market for craft beer export, accounting for 51.3% of total exports. The Asia-Pacific region (excluding Japan) also witnessed robust growth of 7.4%.

The U.K., Sweden, Korea, Australia are the second, third, fourth and fifth biggest markets, accounting for 10.5%, 6.7%, 4.6% and 3.8% exports, respectively. The U.K. market grew 7.1%, accounting for 10.5% of beer exports compared with 10.1% in 2016. The Western Europe market grew 1.3%. However, despite 2017 setting a record, export growth slowed for the third consecutive year. U.S. craft beer exports increased 37%, 16% and 4.4% in 2014, 2015 and 2016, respectively.