Trump's Newest Trade Idea Could Make Your Beer More Expensive

Posted: Feb 22, 2018

The Department of Commerce recommended that President Donald Trump impose new restrictions on imports of aluminum on Friday.

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 considering a new trade policy that, among other consequences, could cause the price of your beer to jump.

The Department of Commerce released recommendations it made to the president on Friday as part of a review looking into imports of steel and aluminum. Those recommendations included possible tariffs, taxes on imports, on aluminum.

While a new tax on importing aluminum would have widespread economic effects, they would likely include an increase in the cost of producing beer — and likely a bump in the end product price. The Beer Institute, a national trade association, blasted the recommendations made by the Commerce Department.

"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.

The recommendations are designed to encourage more aluminum production in the US. But a n 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.

The Department of Commerce is recommending the changes as part of what is known as a Section 232 investigation, which allows the department to look into the national security risks of importing too much of a particular good.

While Trump does not have to take up the recommendations, he does have to issue a ruling on the aluminum issue by April 19.

By Bob Bryan
February 21, 2018

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