Here’s how Trump’s tariffs on aluminum could make your beer more expensive
The Trump administration’s announcement of new tariffs on aluminum and steel drew significant backlash from several industries, including beer producers.
Trump pledged that the newly-announced duties would increase aluminum production in the United States, though a letter released jointly by several organizations whose products are packaged in aluminum — including PepsiCo, Coca-Cola, the Beer Institute, etc. — warned that tariffs would make it more expensive to brew and package beer.
WATCH: Liberals say Trump tariffs on steel, aluminum ‘unacceptable’
“While we appreciate your concern about the viability of the domestic aluminum smelting industry, tariffs or import restrictions will have the unintended consequence of harming many healthy downstream U.S. manufacturing industries, like ours, that are substantially larger in size and economic contribution,” read the letter, which was signed by senior representatives from 16 food and major beverage companies.
The Commerce Department recommended a tariff of 7.7 per cent on all aluminum imports, a tariff of 23.6 per cent on imports of the metal from 12 specific countries, and a limit on the amount of aluminum imported from any specific country.
WATCH: Trump says tariffs to be imposed on steel, aluminum imports
The letter, which is dated Feb. 1, 2018, claimed that a 10 per cent tariff on aluminum would cost beer and beverage producers $256.3 million, a 20 per cent tariff would cost $512.5 million and a 30 per cent tariff would run $768.8 million.
Two weeks following the release of the initial letter, the Beer Institute issued an additional statement once again condemning the proposition.
“Aluminum used to make beer cans is not a national security threat. Aluminum is critical to the well-being of America’s beer industry as more than half of the beer produced annually is packed in aluminum cans or aluminum bottles,” said Jim McGreevy, president of the Beer Institute, in a statement in February.
McGreevy claimed in the statement, tariffs would dramatically increase the cost of aluminum cans and bottles, putting 2.2 million American jobs at risk that depend on the viability of the beer industry.
“If the president accepts any of the recommendations from the Commerce Department’s report on aluminum imports, it will dramatically increase the cost of aluminum in the U.S. and put at-risk American jobs in the beer industry, as well as other industries that are users of aluminum,” he continued.
Upon announcing that these duties would come into effect, many heralded the move as one that would only increase tensions with Canada, who exports a full 16 per cent of steel imported into the United States.
According to the Conference Board of Canada, a nonprofit organization that chronicles the development of Canada’s beer industry, one in every 120 Canadian jobs is supported directly or indirectly by the national beer industry.
Furthermore, according to Beer Canada, national can sales rose about six per cent, while bottle and keg sales declined by about nine per cent and o.5 per cent. In total, cans currently hold 56 per cent share of the Canadian beer market, with bottles and kegs holding the remaining 33.8 per cent and 10.2 per cent respectively.
Global News previously reported that Canadian officials, American officials and businesses on both sides of the border have been pushing for an exception that would shield Canada from the new tariffs.
All Trump said on Thursday is that he’d sign off on the changes sometime next week, and that they will last “for a long period of time.”
© 2018 Global News, a division of Corus Entertainment Inc.