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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: 5259
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 # 45.
#1. To: Deckard (#0)
How to shoot yourself in the foot and he didn't even need a GUN,just his BIG MOUTH
I just read in the New York times that a beer association says it costs about 10 cents per aluminum can. A ten percent tariff would raise the price 1 cent per can. So a twelve pack price would go up 12 cents. We sure shot our self in the foot. Are you Aussies really so poor that 12 cents on a 12 pack would be shooting yourself in the foot?
I am not a beer drinker, I drink Ky Bourbon. I do know a number of people that do drink beer. 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. Other products may be different, but in the beer market, it will be a non event.
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.
#49. To: Tooconservative, Fred mertz (#45)
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.
Top • Page Up • Full Thread • Page Down • Bottom/LatestAmerican 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.
#4. To: paraclete (#1)
#13. To: A K A Stone (#4)
" A ten percent tariff would raise the price 1 cent per can. So a twelve pack price would go up 12 cents. "
#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.
Replies to Comment # 45. So if you drank 3 beers or sodas per day, that's under $11 a year.
End Trace Mode for Comment # 45.
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