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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: 3972
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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Begin Trace Mode for Comment # 12.
#2. To: Deckard (#0)
You're an idiot globalist. If we have no steel and aluminum indusstry then we will be at the mercy of other countries in time of war. Deckard if you agree with this idiot who wrote this article, it would make you a globalist aligned with Obama.
Yeah - like war with Canada, the largest exporter of aluminum into the United States.
#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.
Yeah - like war with Canada, the largest exporter of aluminum into the United States. The Trumpkins will be drinking cheap Canadian swill.
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#12. To: A K A Stone (#2)
If we have no steel and aluminum indusstry then we will be at the mercy of other countries in time of war.
Replies to Comment # 12. 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)
#21. To: Deckard, Canadian Don (#12)
Toronto craft brewer Northern Maverick launches “Fake News Ale”
End Trace Mode for Comment # 12.
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