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Title: Trump's Tariffs Will Crush the Beer Industry
Source:
Reason
URL Source: http://reason.com/blog/2018/03/02/t ... riffs-will-crush-beer-industry
Published: Mar 2, 2018
Author: Eric Boehm
Post Date: 2018-03-05 05:06:36 by Deckard
Keywords: None
Views: 3464
Comments: 62
Donald Trump's plan to slap a 10 percent tariff on all aluminum imports has beer makers belching their outrage. "President Trump's announcement today that he plans to impose a 10% tariff on aluminum imports will increase the cost of aluminum in the United States and endanger American jobs in the beer industry and throughout the supply chain," says Jim McGreevey, president and CEO of the Beer Institute, a trade association. McGreevy called the proposed aluminum tariff "a new $347.7 million tax on America's beverage industry" and warned that imposing those added costs could trigger more than 20,000 in job losses. "American workers and American consumers will suffer as a result of this misguided tariff," said Molson Coors, the Colorado-based macrobrewery that's one of the biggest beer makers in the world, in a statement. According to the U.S. International Trade Commission's Harmonized Tariff Schedule, most aluminum products currently have tariffs set between 2 percent and 4 percent. Breweries stand to be particularly hard hit by the proposed tariffs, but they are hardly the only losers. Everything produced with aluminum will become more expensive if the White House goes ahead with its protectionist plan. Manufacturers who use steel will be hit even harder if Trump decides to impose the 25 percent tariff on all imported steel that he is reportedly mulling. Our Steel and Aluminum industries (and many others) have been decimated by decades of unfair trade and bad policy with countries from around the world. We must not let our country, companies and workers be taken advantage of any longer. We want free, fair and SMART TRADE! — Donald J. Trump (@realDonaldTrump) March 1, 2018 Beyond Trump's nationalist nonsense, the closest thing to an actual rationale for tariffs that the administration has been able to produce is a claim that relying too heavily on imported aluminum and steel is a threat to national security. The United States needs aluminum and steel to make rockets, bombs, and other weapons of war. If the global supply of those commodities were somehow restricted, the argument goes, then it would weaken America's ability to defend itself. That entire line of argument falls apart under even the slightest scrutiny. For example, the largest exporter of aluminum into the United States is Canada, a nation that also happens to be one of America's closest allies. Any scenario where Canada restricts aluminum exports to weaken U.S. national security is a future where Washington has far, far bigger problems than aluminum imports. Meanwhile, the negative consequences of the tariffs are not hypothetical. In January, the Trump administration imposed new tariffs on imported washing machines. (With this, at least, thy spared us the facade of claiming that cheaper, foreign-made washing machines threaten national security.) Prices immediately increased. The same thing will happen with aluminum and steel, except the effects will be felt throughout a much wider swath of the economy. American workers will lose jobs. American consumers will pay higher prices. Beer will become more expensive. But at least we'll be secure against the threat of a war with Canada. And they'll make lots of other things more expensive too.
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#14. To: Deckard (#12)
Yeah - like war with Canada, the largest exporter of aluminum into the United States. Pooh-pooh – Canada and other foreign suppliers are flooding the U.S. aluminum market ....this needs to be stopped, and Donald Trump is stopping it. Michael Bless is chief executive of Century Aluminum, America's second-largest aluminum producer. Last week he called the manager of the company's plant in the Netherlands and asked him to go down to the docks and check out the scene. The employee called Bless back to say European aluminum — not made by Century — was everywhere. It was piled in warehouses and getting loaded onto boats. It's impossible to know exactly where that metal is headed, but there's a high likelihood it's bound for the United States. Aluminum imports hit an all-time high last year after President Trump repeatedly threatened to put tariffs on aluminum and companies rushed to get foreign metals into the United States. In anticipation of the restrictions, there has been a similar import frenzy to kick off 2018. Aluminum shipments from the European Union to the United States are up 24 percent from the start of the year through last week, according to Panjiva, a company that tracks global trade data and was recently acquired by S&P Global. “Our sources tell us there's at least half a million tons between big European and Asian ports being loaded onto ships. That metal will be in the U.S. in two weeks' time,” Bless said. America imports 90 percent of the aluminum that U.S. companies use to make products as diverse as beer cans and fighter jets. Trump is hungry to change that by reviving the domestic aluminum industry. He says it's a matter of national security, a rarely used argument. The last time the United States restrained imports because of national defense concerns was on machine tools in 1983. “The U.S. says this is about national security. That exception has never been invoked since the World Trade Organization came into existence in 1995,” said Jennifer Hillman, a Georgetown law professor and former member of the WTO's Appellate Body. “This is uncharted waters.” The Trump administration argues there have been rapid changes in the aluminum industry in recent years as China began producing the metal and selling it on the world market at prices with which U.S. companies have struggled to compete. The United States has gone from having 23 operational aluminum smelters in 1993 to five now, according to the U.S. Geological Survey. Only one of the remaining smelters — the Century Aluminum plant in Hawesville, Ky. — makes the high-purity aluminum needed for fighter jets, according to a Commerce Department report urging Trump to take action. If that plant shutters, the United States would have to rely on factories overseas. Only the United Arab Emirates and China produce what's needed for the military, although Canadian smelters might be able to shift production to do it, as well. “You see what's happened with our steel and aluminum industries. They're being decimated by dumping from many countries,” Trump said in February. “They're dumping and destroying our industry and destroying the families of workers. And we can't let that happen.” The president argues it's worth paying a tad more for your beer or car if it means an American can keep a good-paying job in a metal factory. Bless has told the Trump administration that he'll hire 300 workers in union jobs at Hawesville, Ky., plant as soon as Trump makes the tariff announcement. Those jobs would pay about $60,000 a year plus benefits. “People are hopeful the jobs come back. These are good jobs,” said Andy Meserve, a longtime maintenance worker at the Hawesville plant and president of United Steelworkers Local 9423. “Trump did pretty good in Kentucky.” The Hawesville plant is running at about 40 percent capacity. Century Aluminum laid off hundreds of workers there three years ago when global metal prices plummeted. Prices have since rebounded, but the company says it would have to make an “enormous investment” to get back to full production levels and it won't do that unless Trump restricts imports. But industries that use aluminum say there's an ugly trade-off: Manufacturing jobs in the auto and aerospace industries might go away if the cost of aluminum rises too much. The aluminum smelting jobs that Trump wants to save account for 3 percent of the total aluminum industry jobs in the United States, according to the Aluminum Association. The other 97 percent of jobs (about 156,000) are in downstream industries that take the raw metal and make something new with it. Jobs are central to the fierce debate in White House over what to do about steel and aluminum. Opponents of sweeping tariffs argue that such action would backfire by hurting employment in other industries, especially if nations retaliate and put tariffs on U.S. agriculture or airplanes. There's a lobbying frenzy, including from GOP lawmakers, to get Trump not to impose the tariff or, at a minimum, to carve out certain types of aluminum and steel. Trump met Tuesday with Republicans in Congress, many of whom voiced concerns about a sweeping tariff and how it could affect jobs and profits in their home states. Rep. Kevin Brady (R-Tex.) said in a statement after the Tuesday meeting, “I’m also committed to working with the president on narrow and targeted remedies that address China’s distortions without hurting other U.S. industries and workers.” The aerospace industry has been one of the most vocal about what could go wrong if Trump imposes a blanket tariff on all aluminum imports. The United States is a top exporter of airplanes and airplane parts. It's one of the key areas in which America runs a trade surplus, but it's also an industry that uses a lot of aluminum. “Anything that is going to disrupt the global supply chain that our industry accesses and potentially raise costs creates a great deal of concern,” said Remy Nathan, vice president of international affairs at the Aerospace Industries Association. He has told the administration to be careful not to “turn around and harm another part of the economy that is critical for economic and national security.” The Department of Defense recently sent a letter arguing that “targeted tariffs are more preferable than a global quota or global tariff.” Canada, a close ally, is the top country the United States imports aluminum from by a wide margin. Russia is No. 2 and China is fourth. Trump talks often about wanting to go after China, but the proposed tariff or quota would harm Canada and Europe, too. “We have urged the president to exclude specialty steel and aluminum imports if he decides to go down the tariff route. If not, it could be extraordinarily burdensome for smaller companies,” said Ann Wilson, senior vice president of government affairs at the Motor & Equipment Manufacturers Association, which represents 1,000 U.S. auto parts suppliers. She says some aluminum products used in cars aren't available in the United States and must be imported, but she argues those imports support more than 870,000 American auto parts jobs since workers modify or assemble those products into larger car parts. The more carve-outs the Trump administration achieves, the more complex it will be to enforce what is allowed through the border. “The government shouldn't be choosing winners and losers in any industry,” said Tim Phillips, president of the Koch-backed Americans for Prosperity, one of many groups lobbying against the tariffs. Trade experts say the national security case for protecting aluminum is stronger than for steel because aluminum imports are so much higher. Only about 30 percent of steel used in the United States comes from overseas, according to the Commerce Department report. For now, the White House continues to deliberate and foreign metal continues to travel on ships to U.S. ports at record rates. Thursday's postponement extends an already long wait for the domestic industry. Aluminum executives thought they would get action last summer. The Commerce Department Section 232 reports on steel and aluminum — known as Section 232 reports after the national defense exemption of the Trade Expansion Act of 1962 — were originally expected to come out in June. Instead, they were delivered to the president in January. “Every week Trump waits, another slog of imports are coming in,” said Hillman, the Georgetown professor.
Well you being a globalist drug pusher. Your position is understandable. Stupid but understandable.
No - you're thinking of the CIA. No I am speaking of you. You post for legal drugs to destroy our youth. You preach globalism with your anti american anti tariff globalist philosophy.
Stop lying. You are way off base here. I've stated my reasons for ending the drug war - your continual bullshit posts insinuating that I want to see kids hooked on drugs make it clear that you are just a knee-jerk, reactionary blowhard. Piss off troll. That may be what you want. Apparently you are to dumb to know that your dream of a drug state would do just that.
Yeah - like war with Canada, the largest exporter of aluminum into the United States. The Trumpkins will be drinking cheap Canadian swill. You hate tariffs because they help American workers. Yes you are a globalist.
Yeah - how's that trillion dollar war on drugs of yours doing keeping kids off drugs? Putz! Putz! It would be going better if we didn't have people like you telling everyone drugs should be legal. Treating marijuana like a miracle drug. You have a serious moral problem with your views on drugs.
There will always be illegal drugs and drug adicts. You cheer them on like it is some kind of noble cause to be a druggy.
Besides the Hawesville, Ky plant, Braidy Industries is planning to build a $1.3-billion aluminum rolling mill plant in Northeast Kentucky www.dailyindependent.com/.../braidy-industries.../article_01b146e0-e5b1-11e7-bc50...
Si vis pacem, para bellum Rebellion to tyrants is obedience to God. Never Pick A Fight With An Old Man He Will Just Shoot You He Can't Afford To Get Hurt "If there are no dogs in Heaven, then when I die I want to go where they went." (Will Rogers)
Based on that bold move and with the country already flooded with aluminum, I cannot help but believe they had some inside information what was coming down the line with Trump. Trump is bringing manufacturing industry back to America. God bless him for doing that. The new aluminum plant works for the betterment of American industry and against Deckard’s strong globalist ideas.
My retirement job might become walking the highways and byways picking up discarded aluminum cans and recycling them. Last time I believe I received 55 cents a pound.
Can't you (at least) get a job flippin' burgers @McKiDees? Maybe we should set a fund raiser for Fred on LF?
Put TLBshow in charge of it. He owes me.
(FRED: "My retirement job might become walking the highways and byways picking up discarded aluminum cans and recycling them. Last time I believe I received 55 cents a pound." Maybe we should set a fund raiser for Fred on LF?" Ok, THAT wuz funny. For starters, I'll kick in a few 2 for 1 Mickey D coupons. (that will take care of both you and War.) According to Recycle USA, 31 empty cans = ONE POUND of empties. How many pounds did you turn in, Fred? GI, what's the usual policy from LE when they see something like that?; People NOT in orange, cleaning the highway of debris independently?
People NOT in orange, cleaning the highway of debris independently? Fred is a free market capitalist who rejects Federal Reserve fiat currency, and measures his wealth in cans. It is you who are not bright, you are speaking of aluminium cans but who drinks a 12 pack a day? only the not so bright. The tariff will feed into the cost of groceries through steel cans, auto's, aircraft, ships, construction and with inflation comes higher interest rates. Basic economics, so we have done the math obviously Dump is incapable of
I've never seen LE bother anyone off the highway unless a complaint is phoned in or the pedestrian is seen on the maintained portion of the roadway. When I worked the road, if I found people walking down the side of any highway, I'd check them for warrants and if there wasn't any file 5's, give them a free ride with the coolest cop they'll ever meet. I'm the infidel... Allah warned you about. كافر المسلح
You'd be better off buying a 4 day pass at Watkins Glenn for the NASCAR race, and pick up .5 cent cans all weekend. The 4 day pass will cost 300.00 but you'll collect 1,500.00 in cans if your work ethic is better than a potato.
I'm the infidel... Allah warned you about. كافر المسلح
Trump's fake "economist" Peter Navarro gets taken to the woodshed by Chris Wallace. "It's the economy, Stupid!" ~Slick Willie, just prior to beating Herbie Bush like a rented mule. America FIRST, shitbag. We've been getting it shoved up our ass with unfair trade for years. Only non Americans and traitors would argue any different. I'm the infidel... Allah warned you about. كافر المسلح
You even post pro drug addict propaganda on a thread dealing with world trade. What an agenda driven hotdog hider you are. I'm the infidel... Allah warned you about. كافر المسلح
Ping to #36. On the other hand, employees of the US Steel industry will be able to buy more beer than they can now. It's quite natural for US companies to complain at any law change that increases their production costs. That's the only thing they will see, and understandably so. But what they won't see on any of their finance charts is that in the bigger picture, promoting job growth in the USA will better enable Americans to buy beer even though it costs a little more. Though any exports of beer, however, won't see that benefit. But exporters are the only ones who have any business complaining. The US Trade deficit has to be addressed, and tariffs are the only way that can happen.
Hey dipwad, I'll work both sides of the highway. You've got the center.
I wonder how much of those old steel mills can be salvaged and restarted. I suspect it's more likely they would be completely torn down and replaced with state of the art facilities. And any business doing that would need to be assured that in a post Trump America, the fed gov would remain as loyal to American businesses as Trump is.
They may be looking at no price increase in which case sales remain the same but their shareholder profit margin drops by the gross amount of tax (and who wouldn't complain about some $300 million in reduced profits). But while the manufacturing cost increase of a penny a can may not sound like much, that increase gets leveraged up every time that can changes hands on it's way to the consumer. It wouldn't surprise me if it adds a nickle to the final retail price which would be a $1.20 for a case of beer. At that point, consumers start going to the competition.
I read some beer distributor or whatever organization Google gave me said it costs them ten cents a can. So ten percent would be one cent like I mentioned earlier. I was thinking though. It should be less since the aluminum is only part of the price. The production and distribution costs are already in the equation. So it seems it should be less than one cent per can.
So if you drank 3 beers or sodas per day, that's under $11 a year. Of course, that won't take into account all the other uses of aluminum. Those beer guzzlers could pay out a lot more in other common products. It's even conceivable that some group of people would pay more in increased steel and aluminum tariff costs than the tax break they got this year. Some of those new tax cuts added up to very little for some people even if the vast majority got a decent bump in take-home pay.
Sounds good. Well, except for... "Parent of Pueblo steel mill sold to Russian firm" But, it'd be nice to see that place operating again anyhow.
One example in this case where costs get leveraged up is that distributors normally do a percentage mark up on the price of the things they deliver. So lets say they do a 30% markup on the price of something they distribute. If the manufacturing cost of something were, say, $100,000 then they apply their 30% markup that means the people they deliver to pay $130,000. So then if the manufacturing costs go up 5% making it $105,000, then the distributor adds in a 30% mark up making it 105k x 1.3 = $136,500, meaning a $5K increase to the manufacturer results in a $6500 increase to the next link in the distribution chain. Remember it is not normal for resellers of goods to simply add a fixed amount of profit to the things the resell. They instead add a percentage. That's not gouging. That's the way it works. Resellers are forced to accept risk with the goods they resell in the event of loss or damage, for example, and only by marking up on a percentage compensates them for that risk. So every time beer changes hands from the manufacturer to the end consumer, there's a markup. That means 1 penny more on the source manufacturing side will get amplified to the end consumer. Maybe it wouldn't make it to a nickel a can as I suggested previously, but it will definitely be more than a penny.
Unless they intend to import Russian workers, which would also be allowed by Trump's permission, they'll need to hire US workers to run it.
It should raise the price at scrapyards like Mertz hinted at. Thereby lifting the standard of living of homeless people and Fred Mertz. When this kicks in Fred will his sanity back and get on the sane Trump train.
I'll be in tall cotton when this tariff kicks in. FireIsland still has the center line of the highway.
Yeah I was thinking that too. But I didn't want to type anymore so I left where I did. Anyhow coca cola, anheiser Busch and other are big smart companies. They aren't going to just be suckers when they know that high of a price raise isn't necessarily justified. They can get it from the competition which would like a new contact. Heck the big companies probably make their own cans.
The Can Can estimate: $0.01/can Aluminum soda cans are around $0.05 - $0.10 per can for orders of less than 100,000 units. Prices decrease substantially as quantity increases, so I suspect that Coca-Cola is paying less than $0.01 per can, given that they distribute 1.9 billion servings of coke per day. Granted, some of these "servings" are from soda fountains and glass bottles, etc, but it gives a good picture of the scale at which they are operating. The Sugar Sugar estimate: $0.005/can (Please note that lots of coke use corn syrup instead of cane sugar, but my price estimate is for cane sugar) Sugar runs $200/ton for orders for orders of less than 50 tons. There's roughly 33 grams of sugar in one can of soda. Given the same logic, let's make an educated guess that 1.9 billion servings * 33 grams = ~63 billion grams There are 907,185 grams in a ton, so that's about 72,250 tons of sugar. Let's give them a 30% discount on the cost of sugar, which brings us to $140/ton, or ($140/907,185)*33 = $0.005/can for sugar. Water, CO2, Food Coloring, Flavors Everything else estimate: $0.00075/can mentions that Coke pays "10$ for 100,000 liters of water". There's roughly 34 fl oz in a liter, and 12 fl oz in a can. Given some losses, let's just say that there's 2.5 cans of coke in every liter. That translates to $10 on water for every 40,000 cans of Coke. That's $0.00025 spent on water per can. Let's add $0.0005 for all other things, like food color and flavoring. https://www.quora.com/How-much-does-it-cost-to-manufacture-355-ml-12-fl- ounces-of-Coca-Cola-Do-we-pay-much-more-than-that-What-accounts-for-the- difference-How-do-they-get-so-many-people-to-pay-so-much-more
Looks like thats wobbling across the "3d chess board" at 'bout the same pace as "You'd be in jail" and "I'll repeal Obamare".
Comments (55 - 62) not displayed.
Top • Page Up • Full Thread • Page Down • Bottom/Latest If we have no steel and aluminum indusstry then we will be at the mercy of other countries in time of war.
#15. To: Deckard (#12)
#16. To: A K A Stone (#15)
Well you being a globalist drug pusher.
“Truth is treason in the empire of lies.” - Ron Paul
Those who most loudly denounce Fake News are typically those most aggressively disseminating it.
#17. To: Deckard (#16)
#18. To: A K A Stone (#17)
You post for legal drugs to destroy our youth.
“Truth is treason in the empire of lies.” - Ron Paul
Those who most loudly denounce Fake News are typically those most aggressively disseminating it.
#19. To: A K A Stone (#17)
You preach globalism
“Truth is treason in the empire of lies.” - Ron Paul
Those who most loudly denounce Fake News are typically those most aggressively disseminating it.
#20. To: Deckard (#18)
#21. To: Deckard, Canadian Don (#12)
Toronto craft brewer Northern Maverick launches “Fake News Ale”
#22. To: Deckard (#19)
#23. To: A K A Stone (#20)
Apparently you are to dumb to know that your dream of a drug state would do just that.
“Truth is treason in the empire of lies.” - Ron Paul
Those who most loudly denounce Fake News are typically those most aggressively disseminating it.
#24. To: Deckard (#23)
Yeah - how's that trillion dollar war on drugs of yours doing keeping kids off drugs?
#25. To: Deckard (#23)
#26. To: Gatlin (#14)
#27. To: Stoner (#26)
Besides the Hawesville, Ky plant, Braidy Industries is planning to build a $1.3-billion aluminum rolling mill plant in Northeast Kentucky www.dailyindependent.com/.../braidy-industries.../article_01b146e0-e5b1-11e7- bc50...
Thanks for that information. I did find It interesting.
#28. To: Deckard (#0)
#29. To: Fred Mertz (#28)
#30. To: buckeroo (#29)
#31. To: buckeroo, Fred Mertz, war, GrandIsland (#29)
BUCK: "Can't you (at least) get a job flippin' burgers @McKiDees?
#32. To: Liberator, Fred Mertz, Free Market Capitalist, buckeroo (#31)
#33. To: A K A Stone (#9)
How is that giving back the tax break?
#34. To: Liberator (#31)
#35. To: Fred Mertz (#28)
(Edited)
#36. To: Gatlin, A K A Stone, Deckard, TooConservative (#10)
(Edited)
#37. To: Deckard (#0)
#38. To: Deckard (#23)
#39. To: GrandIsland, paraclete, buckeroo (#38)
#40. To: Deckard (#0)
McGreevy called the proposed aluminum tariff "a new $347.7 million tax on America's beverage industry" and warned that imposing those added costs could trigger more than 20,000 in job losses.
#41. To: GrandIsland (#34)
(Edited)
When I worked the road, if I found people walking down the side of any highway
#42. To: Gatlin (#10)
#43. To: Stoner (#13)
Believe me, adding 12 cents to a 12 pack, or 24 cents to a case is not going to slow them down. They will be just like cigarette smokers when wholesale / retail prices went up. They will keep buying / consuming.
#44. To: Pinguinite (#43)
#45. To: A K A Stone (#44)
I read some beer distributor or whatever organization Google gave me said it costs them ten cents a can. So ten percent would be one cent like I mentioned earlier.
#46. To: A K A Stone (#7)
That means more steel jobs in the USA
https://www.denverpost.com/2006/11/20/parent-of-pueblo- steel-mill-sold-to-russian-firm/
#47. To: A K A Stone (#44)
I was thinking though. It should be less since the aluminum is only part of the price. The production and distribution costs are already in the equation. So it seems it should be less than one cent per can.
#48. To: VxH (#46)
"Parent of Pueblo steel mill sold to Russian firm"
#49. To: Tooconservative, Fred mertz (#45)
So if you drank 3 beers or sodas per day, that's under $11 a year.
#50. To: A K A Stone (#49)
#51. To: Pinguinite (#47)
One example in this case where costs get leveraged up is that distributors normally do a percentage mark up on the price of the things they deliver. So lets say they do a 30% markup on the price of something they distribute. If the manufacturing cost of something were, say, $100,000 then they apply their 30% markup that means the people they deliver to pay $130,000. So then if the manufacturing costs go up 5% making it $105,000, then the distributor adds in a 30% mark up making it 105k x 1.3 = $136,500, meaning a $5K increase to the manufacturer results in a $6500 increase to the next link in the distribution chain.
#52. To: Pinguinite (#47)
#53. To: Pinguinite (#48)
[H.R.170 - Protect and Grow American Jobs Act]
https://www.congress.gov/bill/115th-congress/house- bill/170
#54. To: Pinguinite (#42)
I never considered this....excellent point, for a libertarian :).
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