Hrabour reports the U.S. beverage industry paid about US$250 million for aluminium can sheet since the tariff implementation

Beer Institute that represents the American brewing industry forecasted last year that aluminium and steel tariffs would cost the beer industry US$347 million and may cost about 20,000 jobs. Harbor Aluminum, an aluminium industry intelligence group was commissioned by a lobbying group to do a study to estimate the cost of section 232 aluminium tariffs after they were imposed on March 8, 2018.

According to the Hrabour report, the U.S. beverage industry paid about US$250 million for aluminium can sheet between March and December 2018. The United States Department of the Treasury collected US$50 million as tariffs while the major profit share went to the U.S. aluminium smelters and rolling mills.

“We see beer as the crown jewel of American manufacturing,” BI president and CEO Jim McGreevy told CNBC last week. “This is really hurting us.”

The U.S. can sheets are made from 70% recycled domestic aluminium scrap, which is free of tariffs and 30 % imported primary aluminium which falls under tariffs.  However, according to the BI, domestic beverage manufacturers paid 100% tariff to buy the can sheets to make their beverage cans. According to Harbor Aluminum, U.S. rolling mills and smelters earned US$173 million and US$27 million over a 10-month period as they charged the end users a “tariff-paid price” on the entire aluminium can-sheet, while they paid tariff only for the 30% of the raw material. They overcharged showing that the can sheet was made entirely from imported primary aluminium.

“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 aluminium,” “McGreevy said in a press release.

McGreevy also said to CNBC that many brewing companies have decided to absorb the increased costs of aluminium by passing the cost to its consumers.

Robert Budway, the president of the Can Manufacturers Institute (CMI) also said that President Trump’s 10 per cent tariff on aluminium would add about US$20,000 extra cost a brewery that makes and cans 10,000 barrels. BI estimates that about 60% of all U.S. beer is packed in aluminium cans and bottles.