A little bit more than one year after U.S. President Donald Trump imposed tariffs on steel and aluminum (inside.beer, 24.4.2018), the Beer Institute has published findings on the effect of the import duties on the U.S. beverage industry, including brewers.
Research done by Harbor Aluminum, an independent authority on the aluminum industry and its markets, found that while the U.S. beverage industry paid an equivalent to USD 250 million in Section 232 tariffs for aluminum cansheet during March to December 2018, the U.S. government collected only around USD 50 million of that amount. Harbor Aluminum estimates U.S. smelters got roughly USD 27 million and U.S. rolling mills around USD 173 million, by charging end-users a tariff-paid price as if the entire product of aluminum cansheet consisted of imported primary aluminum.
U.S. cansheet contains 70 percent domestic aluminum scrap – recycled metal remaining in the country, which is exempted from Section 232 tariffs. Only 30 percent of U.S. cansheet is comprised of imported primary aluminum. However, the U.S. beverage industry paid a tariff for all of the aluminum cansheet as if it consisted entirely of imported primary aluminum.
“Brewers are paying a tariff price even on domestic aluminum,” said Jim McGreevy, President and CEO of the Beer Institute. “I have heard from brewers large and small from across the country who are seeing their aluminum costs drastically increase, even when they are using American aluminum.”
“Two examples, MillerCoors, one of the largest brewers in this country has seen a USD 40 million impact on their company. Summit Brewing Company from St.Paul, Minnesota, one of the founders of the craft movement 30 years ago, has seen its cost increased USD 160,000,” McGreevy said in an interview on CNBC.
Approximately 60 percent of the beer produced and sold in the U.S. is packed in aluminum cans and bottles, the BI estimates.