05 Feb 2018 --- CEOs from leading US food and beverage companies and trade associations have written to President Trump urging his administration not to impose tariffs or import restrictions on cansheet, primary aluminum, and scrap.
The move follows a report from the Department of Commerce resulting from its investigation examining the national security impacts of aluminum imports, ordered by President Trump last year.
The letter notes a 10 percent tariff on aluminum would cost beer and beverage producers US$256.3 million, a 20 percent tariff would cost US$512.5 million, and a 30 percent tariff would run US$768.8 million.
Opponents claim the tariffs would increase manufacturing costs and damage the beverage industry.
“Imposing an artificial price hike on American companies that employ millions of people will weaken the economy and hurt working families by raising prices, costing jobs and reducing incomes unfairly,” said Susan K. Neely, American Beverage Association President and CEO.
“Tariffs on our companies' imports of primary and cansheet aluminum will greatly increase our manufacturing costs and harm many more workers than it helps.”
“Imports of primary aluminum and cansheet used to manufacture beer cans do not threaten national security,” said Jim McGreevy, Beer Institute President and CEO.
“Aluminium is critical to the beer industry and its employees since more than half of the beer produced annually are packaged in aluminum cans or aluminum bottles. Any trade restriction on primary aluminum or cansheet imports would disrupt the market and increase costs to brewers and beer importers as aluminum customers.”
“The administration should take into consideration the unintended consequence of a trade action against aluminum can sheet and primary aluminum that would ripple across the supply chain.”
“Like most industries, can makers depend on predictability in supply and price. If the aluminum supply is hindered by unnecessary tariffs or trade restrictions, it could lead to supply inefficacies and affect product availability,” added Robert Budway, Can Manufacturers Institute President.
“Even a small tariff will result in greater uncertainty about prices, supply, financing and would dramatically curtail investment and hiring in the United States.”
The importation of aluminum is critically important to American consumers, claim industry leaders. The aluminum can industry produces 96 billion food, beverage, and aerosol containers, employing more than 11,000 American workers in 164 plants in 33 states, Puerto Rico, and American Samoa.
In total, the aluminum can industry generates US$13.3 billion in economic activity.
In addition, the beer industry supports more than 2.2 million American jobs, generating more than US$350 billion annually in economic output.
In 2016, 56 percent of the beer produced in the US was packed in aluminum cans or aluminum bottles.
The non-alcoholic beverage industry accounts for nearly 240,000 direct industry jobs, and another 788,000 jobs in grocery, retail, and other industries that depend on beverage sales.
The industry has a US$166.5 billion direct economic impact, US$21.1 billion of which is wages paid to American workers.
The US has been in a deficit position with respect to primary aluminum since the end of World War II. In fact, imports of aluminum to the US have increased as production within the US has decreased.
Canada is the leading source of US aluminum imports, accounting for 66 percent of total unmanufactured aluminum imports in 2015; no other nation accounts for more than 10 percent of total unmanufactured aluminum imports.
Background to investigation on the effect of aluminum imports
Last April citing Section 232 of the Trade Expansion Act of 1962, President Trump sent a memorandum to the US Commerce Department directing it to investigate whether aluminum imports are jeopardizing US national security.
On Friday, January 19, 2018, Secretary Ross formally submitted to President Trump the results of the Department's investigation into the effect of wrought and unwrought aluminum imports on US national security.
The President now has until April 20 to decide on any potential action based on the findings of the investigation.
The companies and trade associations that signed the letter include: American Beverage Association, Ardagh Group, Ball Corporation, Beer Institute, Brewers Association, Can Manufacturers Institute, The Coca-Cola Company, Constellation Brands Beer Division, Crown Holdings, Dr Pepper Snapple Group, HEINEKEN USA, Molson Coors Brewing Company, National Association of Beverage Importers, National Beer Wholesalers Association, PepsiCo North America and Rogue Ales.