USA: Tariffs on aluminum and price irregularities put pressure on brewers

Tariffs on aluminum imports and price irregularities of components of the aluminum price have caused aluminum prices to surge by 25% in the last two months. The price of primary aluminum has gone from $2.000 a ton in the week before the tariffs were implemented to today  $2.500 a ton. American brewers spend $5 billion on beer cans every year. $2.7 billion of it can be attributed to aluminum cans.

“We think that this tariff is a $350 million tax on beer brewers at a time when there are more than 5,000 breweries in the United States,” said Jim McGreevy, Oresident and CEO of the Beer Institute in an interview last Friday on CNBC. The Beer Institute is a 156 year-old organization representing brewers, importers and suppliers of the industry in the United States.

In February, McGreevy warned that the a tariff put at risk American jobs in the beer industry, as well other industries that are users of aluminum. "As more than 2.2 million American jobs depend on our nation's vibrant beer industry, we urge President Trump to consider the adverse impact trade restrictions on aluminum will have on American jobs before making his final decision,” he said at that time (, 16.2.2018)

Finally on March 8, US President Donald Trump signed his steel and aluminum tariff proclamations. Since the regulation excluded Canada and Mexico and also left the door open to other countries to ask for exemptions, the general spot aluminum price, which is only one part of the price of aluminum,  fell. However, the second part of the price for US customers, the so-called Midwest premium did not decline much at all.

In last week’s interview Mc Greevy stressed the fact that his organization had witnessed irregularities in the Midwest premium, a price component of aluminum “that is essentially a shipping and handling fee that allows aluminum producers to get their metal to North America.” (McGreevy)

“Unfortunately we have seen that the tariffs have exacerbated the price irregularities of the Midwest premium in particular,” he said.  “We have seen that skyrocket last year just as the news of the investigation started, and now on the implementation of the tariff we have seen that skyrocket [again],” he added.  The price of Midwest premium aluminum has more than doubled since Jan. 1. “I think one thing the administration could do is to take a serious look at how the price is set,” McGreevy concluded.

Last week, aluminum prices surged to their highest in seven years on the back of the US sanctions on Russian companies, including aluminum giant Rusal, but softened again after the US indicated this week it could soften its sanctions.

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