President Donald Trump is reportedly poised to impose new restrictions on imports of aluminum.
Trade associations representing beer companies and brewers warn that the restrictions could increase the cost of brewing and packaging beer.
This, in turn, could lead to price increases for beer consumers in the US.
President Donald Trump is closing in on announcing a new trade policy that, among other consequences, could cause the price of your beer to jump.
According to reports, Trump is set to announce new tariffs — taxes on imports — for foreign steel and aluminum in the coming days. The new tariffs would come after the Department of Commerce recommended new trade restrictions to combat dumping of metals by countries into the US.
While a new tax on importing aluminum would have widespread economic effects, one of the those consequences would likely include an increase in the cost of producing beer — and in turn a bump in the end product price. The Beer Institute, a national trade association, blasted the recommendations made by the Commerce Department when they were released in February.
“If the president accepts any of the recommendations from the Commerce Department’s report on aluminum imports, it will dramatically increase the cost of aluminum in the US and put at risk American jobs in the beer industry, as well other industries that are users of aluminum,” the institute said in a statement.
The Commerce Department recommended a tariff of 7.7% on all aluminum imports, a 23.6% tariff on imports of the metal from 12 specific countries, or a quota (a limit on the amount of a good imported from a specific country) on all aluminum imports.
According to new reports, however, Trump wants to bump the aluminum tariff to 10% since it is a “round number.”
The recommendations are designed to encourage more aluminum production in the US. But an earlier letter from the Beer Institute, Heineken USA, the Coca-Cola Company, the National Association of Beverage Importers, the Molson Coors Brewing Company, and others warned about the potential costs of the increase to the beer companies.
“A tariff or quota will immediately disadvantage these domestic businesses since foreign competitors would have the advantage of not paying an artificially inflated raw cost,” the letter read. “We estimate a tariff of 10% on this aluminum would cost beer and beverage producers $256.3 million.”
According to the Milwaukee Journal-Sentinel, many local brewers and beverage associations said increased tariffs could lead to a price bump.
“Even a small tariff will result in greater uncertainty about prices, supply, financing and would dramatically curtail investment and hiring in the United States,” Robert Budway, the Can Manufacturers Institute president, said in a statement.