Beer Institute: One Year After Tariffs, Brewers Are Overpaying for Cansheet
WASHINGTON, D.C. – One year since the 232 tariffs on aluminum took effect, the Beer Institute retained Harbor Aluminum to estimate and detail the impact the tariffs on aluminum cansheet are having on the U.S. beverage industry, including brewers.
Research done by Harbor Aluminum, an independent authority on the aluminum industry and its markets, found that while the U.S. beverage industry paid an equivalent to $250 million in Section 232 tariffs for aluminum cansheet during March to December 2018, the U.S. government collected only around $50 million of that amount. Harbor Aluminum estimates U.S. smelters got roughly $27 million and U.S. rolling mills around $173 million, by charging end-users a tariff-paid price as if the entire product of aluminum cansheet consisted of imported primary aluminum.
U.S. cansheet contains 70 percent domestic aluminum scrap – recycled metal remaining in the country, which is exempted from Section 232 tariffs. Only 30 percent of U.S. cansheet is comprised of imported primary aluminum. However, the U.S. beverage industry paid a tariff for all of the aluminum cansheet as if it consisted entirely of imported primary aluminum.
“Brewers are paying a tariff price even on domestic aluminum,” said Jim McGreevy, President and CEO of the Beer Institute. “I have heard from brewers large and small from across the country who are seeing their aluminum costs drastically increase, even when they are using American aluminum.”
On March 23, 2018, President Trump’s 232 aluminum tariffs took effect. Since then, U.S. brewers’ aluminum costs have skyrocketed, even for those buying domestically sourced metal because of how aluminum is priced in America with the opaque Midwest Premium.
On June 18, 2018, Congressman Ken Buck (R-CO) led a bipartisan letter to then-Attorney General Jeff Sessions signed by 32 bipartisan members of Congress asking the Department of Justice to examine aluminum pricing irregularities in the Midwest Premium. In testimony before the Senate Finance Committee on June 20, 2018, Commerce Secretary Wilbur Ross said, “There are people who illegitimately are profiteering out of the tariffs.”
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The Beer Institute is a national trade association for the American brewing industry, representing brewers of all sizes, as well as beer importers and industry suppliers. First founded in 1862 as the U.S. Brewers Association, the Beer Institute is committed today to the development of sound public policy and to the values of civic duty and personal responsibility. For additional updates from the Beer Institute, visit our website, follow @BeerInstitute on Twitter, like the Beer Institute on Facebook, and follow the Beer Institute on Instagram.
