Beer Prices May Rise Because of Trump’s Proposed Aluminum Tariff

March 2, 2018, 6:31 PM UTC

President Donald Trump’s plan to impose a 10% tariff on aluminum may end up hurting one American industry in particular: beer.

Beverage makers Molson Coors Brewing and Heineken sent a letter to Trump last month about the potential tariff, noting that it will likely cause beer and other drink producers an extra $256 million annually because of higher costs for their aluminum cans.

Those additional costs are likely to passed down to consumers through price hikes.

The Beer Institute, a trade group, estimated that the tariff would create the equivalent of a $347.7 million tax on beverages served in cans, according to The Wall Street Journal. That addition cost could equal the “loss of tens of thousands of jobs.”

Miller Coors expressed its concerns about the President’s proposed tariff on Twitter, stating the aluminum used in beer cans “does not cause any national security issues.” Trump’s reasoning behind imposing the tariffs is due to a Commerce Department study that concluded that metal imports have impacted America’s ability to make its own weapons.

More than half the beer sold in the United States is sold in cans. Cans are cheaper and easier to ship than bottles, and also prevent oxygen and light from getting to beer that may cause it to go bad. In recent years many craft beer producers have turned to using cans as their primary way of distributing beer, and larger companies such as Budweiser and Miller have used cans for years to distribute products.

Bud Light, in particular, has been positioned as the beer of working-class America, The Wall Street Journal notes. That “working class” demographic is a huge part of Trump’s base.

Read More

Great ResignationInflationSupply ChainsLeadership