President Donald Trump announced Thursday new proposed tariffs on steel and aluminum imports. Naturally, this is seen as a positive for domestic steel manufacturers but behind the scenes one overlooked segment could be harmed: beer companies.
MillerCoors said on Twitter it's "disappointed" with the proposed 10 percent tariff on aluminum. The reason behind this is simple: MillerCoors, owned by Molson Coors Brewing Co TAP, along with many other beer makers, use aluminum to make its cans. While the company said it uses domestic aluminum as much as possible there isn't enough supply to satisfy the demand from beer and other beverage makers.
Why It's Important
MillerCoors also said the American worker and American consumer would suffer from Trump's "misguided tariff." Anheuser Busch Inbev NV (ADR) BUD echoed similar sentiments.
Similarly, a press release from the Beer Institute in February said the administration's proposed tariff would "dramatically increase the cost of aluminum in the U.S. and put at risk American jobs in the beer industry, as well other industries that are users of aluminum."
The Can Manufacturers Institute, a collection of multiple noteworthy beer and beverage makers, said in a public letter addressed to Trump it collectively produces 96 billion cans per year.
A tariff or quota on imported aluminum would have a "major negative impact" on the food and beverage industries. Specifically, a 10 percent tariff on aluminum would cost beer and beverage makers a combined $256.3 million in extra costs. A 20 percent tariff could cost companies an extra $512.5 million and a 30 percent tariff would cost companies $768.8 million.
"While we appreciate your concern about the viability of the domestic aluminum smelting industry, tariffs or import restrictions will have the unintended consequence of harming many healthy downstream U.S. manufacturing industries, like ours, that are substantially larger in size and economic contribution," the letter said. "In sum, tariffs or import restrictions on aluminum will hurt the U.S. economy more than they will help U.S. smelters."
The White House has yet to finalize a tariff and it's unknown if tariffs would be gradual. Nevertheless, Trump made it clear "everything would be completed by next week."
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.
All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.
Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.
Rate collection and criteria: Click here for more information on rate collection and criteria.