US food and beverage companies urge Trump not to impose tariffs on aluminium imports

Leading US food and beverage companies and trade associations have urged President Trump and his administration not to impose tariffs or import restrictions on primary aluminium, cansheet and scrap.  The representatives have submitted a letter to the President’s office urging the same after submission of the investigation report on the national security impacts of aluminium imports by the Department of Commerce.

They observed that a 10% tariff on aluminium would cost beer and beverage producers US$256.3 million, a 20% tariff would cost US$512.5 million, and a 30% tariff would cost US$768.8 million. This, they think would increase manufacturing costs and harm the beverage industry.

 “Imposing an artificial price hike on American companies that employ millions of people will weaken the economy and hurt working families by raising prices, costing jobs and reducing incomes unfairly,” said Susan K. Neely, American Beverage Association President and CEO.

Jim McGreevy, Beer Institute President and CEO reiterated that primary aluminium and cansheet imported for consumption in the beer industry do not threaten national security.

The letter highlighted the importance of aluminium in the beer industry as more than half of the beer produced annually is packaged in aluminium cans or bottles. Any trade restriction on primary aluminium or cansheet imports, they believe would disrupt the market and increase costs to brewers and beer importers.

They urged the administration to take into consideration the ripple effects of a trade action against aluminium can sheet and primary aluminium on the supply chain.

If the aluminum supply is hindered by unnecessary tariffs or trade restrictions, it could lead to supply inefficacies and affect product availability,” added Robert Budway, Can Manufacturers Institute President.

The letter claimed US aluminium can industry produces 96 billion food, beverage, and aerosol containers, employing more than 11,000 American workers and generates US$13.3 billion in economic activity. The beer industry supports more than 2.2 million American jobs, generating more than US$350 billion revenue annually.

According to the letter 56% of the domestically produced beer in 2016 was packed in aluminium cans or bottles. The non-alcoholic beverage industry accounts for nearly 240,000 direct industry jobs. The US primary aluminium market has always been in deficit due to high demand  and  it has become import dependent due to falling aluminium production in last two decades.

Canada accounts for 60%of total unwrought aluminium imports in 2016; and the rest of the countries contribute not more than 10% of aluminium imports each.

On Friday, January 19, 2018, Secretary Ross formally submitted the results of the Department's investigation into the effect aluminium imports on US national security. The President would decide on any potential action based on the findings by April 20.

Some of the major companies and trade associations that signed the letter include: American Beverage Association, Ardagh Group, Ball Corporation, Beer Institute, Brewers Association, Can Manufacturers Institute, The Coca-Cola Company, HEINEKEN USA, National Beer Wholesalers Association, PepsiCo North America and Rogue Ales.