President Donald Trump announced that he will be imposing tariffs of 25 percent and 10 percent, respectively, on imported steel and aluminum under the guise of “bringing back manufacturing jobs.” We have our doubts about whether or not that claim will bear out (here’s a smart person discussing it if you care), but regardless, as it relates to the domestic beer industry, there will be an immediate impact in terms of can prices and supply.
Aluminum cans, while gaining in popularity, were already tough for some breweries to procure in the quantities they needed. The United States imports most of its aluminum, and there isn’t nearly the supply domestically to support our aluminum needs — in 2016, 52 percent of aluminum for domestic consumption was imported, up from 11 percent in 2012, according to Interior Department statistics, with Canada being the leading source.
We shall see what effect this has on the market going forward. Jim McGreevy, Beer Institute President and CEO, for one, was unhappy:
“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. President Trump’s announcement today that he plans to impose a 10% tariff on aluminum imports will increase the cost of aluminum in the United States and endanger American jobs in the beer industry and throughout the supply chain.
“According to third-party analyses, this 10% tariff will create a new $347.7 million tax on America’s beverage industry, including brewers and beer importers, and result in the loss of 20,291 American jobs. We appreciate the many members of Congress — both Republicans and Democrats — as well members of the cabinet who spoke out against imposing this tariff, many of whom specifically cited their concerns for how this tariff would negatively impact America’s beer industry.
“Imported aluminum used to make beer cans is not a threat to national security. The largest importer of aluminum to the United States is Canada — one of America’s strongest allies. We urge the Department of Commerce to exclude imported aluminum and cansheet used to make beer cans from these tariffs so as not to unnecessarily increase costs on American businesses and put jobs at risk.”