Beverages

Beverage Makers Wince at Aluminum Tariff

Say Trump’s plan will mean layoffs and increased costs

WASHINGTON -- President Trump's proposed tariff on foreign steel and aluminum caught many businesses and traders off guard, but perhaps its most surprising result could be that the tax will likely raise the cost of beer, carbonated soft drinks and other beverages in the United States.

Trump said March 1 that his administration will impose a 25% tariff on steel imports and a 10% tariff on aluminum. At the heart of the looming trade action is Trump's campaign promise to create jobs in the United States, particularly in factories, by getting tough on trade, according to a CNN report.

Both metals, of course, are crucial raw material for automobiles, airplanes and appliances made in the United States. However, that tariff is likely to force price increases on food and drinks packaged in aluminum, causing alarm in the beverage industry.

"Like most brewers, we are selling an increasing amount of our beers in aluminum cans, and this action will cause aluminum prices to rise and is likely to lead to job losses across the beer industry," Molson Coors Brewing Co., Denver, said in a statement. "American workers and American consumers will suffer as a result of this misguided tariff."

Brewer Anheuser-Busch Inc., St. Louis, expressed similar concerns.

"Because beer is increasingly packaged in aluminum cans, the proposed 10% tariff on aluminum will likely cost U.S. brewers millions of dollars, making it more difficult to grow and further invest in our U.S. operations," the company said in a statement. "We urge the administration to consider the impact of these decisions on the thousands of hard-working Americans and millions of beer drinkers that make up the U.S. beer industry.”

The Beer Institute, an industry group, said the 10% aluminum tariff would result in the loss of 20,300 jobs at bars, breweries and every task in between, according to CNN. It cited an analysis from John Dunham & Associates, an economic consulting firm in New York.

Other major beverage makers—Coca-Cola Co., Atlanta; PepsiCo Inc., Purchase, N.Y.; Dr Pepper Snapple Group Inc., Plano, Texas; and beer importer Constellation Brands Inc., Chicago—issued a letter to the president on Feb. 1 in anticipation of the tariffs, according to a report by The Street. In it, the companies said "tariffs or quotas on imports of primary aluminum would have a major negative impact on downstream U.S. manufacturers like food and beverage companies."

Trump is expected to officially announce the tariff’s in the next week. He exempt some countries from the tariffs to avoid hurting American allies and easy the burden on U.S. manufacturers that use the metals.

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