Trump's Tariffs Will Crush the Beer Industry

[EasyAce]

And they'll make lots of other things more expensive too
By Eric Boehm
http://reason.com/blog/2018/03/02/trumps-tariffs-will-crush-beer-industry

Donald Trump's plan to slap a 10 percent tariff on all aluminum imports has beer makers belching their outrage.

"President Trump's announcement today that he plans to impose a 10% tariff on aluminum imports will increase the cost of aluminum in the United States and endanger American jobs in the beer industry and throughout the supply chain," says Jim McGreevey, president and CEO of the Beer Institute, a trade association.

McGreevy called the proposed aluminum tariff "a new $347.7 million tax on America's beverage industry" and warned that imposing those added costs could trigger more than 20,000 in job losses . . .

. . . [T]he closest thing to an actual rationale for tariffs that the administration has been able to produce is a claim that relying too heavily on imported aluminum and steel is a threat to national security. The United States needs aluminum and steel to make rockets, bombs, and other weapons of war. If the global supply of those commodities were somehow restricted, the argument goes, then it would weaken America's ability to defend itself.

That entire line of argument falls apart under even the slightest scrutiny. For example, the largest exporter of aluminum into the United States is Canada, a nation that also happens to be one of America's closest allies. Any scenario where Canada restricts aluminum exports to weaken U.S. national security is a future where Washington has far, far bigger problems than aluminum imports . . . American workers will lose jobs. American consumers will pay higher prices. Beer will become more expensive. But at least we'll be secure against the threat of a war with Canada.

[WingNot]

I drink my beer from bottles. 

[guitar4jesus]

Guess we'll all have to switch to 40s....

[INVAR]

That ought to kill the majority of his base if the truth of why their beer has skyrocketed in price is ever actually reported.

His True Believers will Trumpsplain to them that they must eat their peas for the good of the country.

[WingNot]

Guess we'll all have to switch to 40s....

Beautiful.  Absolutely Beautiful g4j

[DB]

Aluminum is expensive in the US to produce because of energy costs.

Lower energy costs and the US could be competitive on its own.

The environazis have done everything in their power to make energy more expensive. This is just one of the consequences.

[WingNot]

This is good news for the  guy's like me who walks the hiways and byways looking for aluminum cans to recycle.   The price per salvage pound will increase.  Now I can retire at a level of comfort and style that I have grown accustomed to. 

[EasyAce]

Just wait until the soda industry gets hit. Coca-Cola and Pepsi may find themselves unlikely allies if the tariffs actually go through and
they start taking effect.

(I don't drink beer---when I want a drink-drink, which isn't exactly all that often, I prefer bourbon and Coke or a nice glass of wine, with maybe a Scotch and water for
a changeup drink.)

[driftdiver]

Aluminum is expensive in the US to produce because of energy costs.

Lower energy costs and the US could be competitive on its own.

The environazis have done everything in their power to make energy more expensive. This is just one of the consequences.

@DB
The average industrial cost of electricity in China is 28.04% cheaper then the US average.   Some states have lower costs and the cost is only about 12% cheaper.

While significant I'd think the lack of labor laws, environmental laws and the myriad of other govt regulations is much more significant.

[driftdiver]

Scotch doesn't come in cans.

[DB]

@DB
The average industrial cost of electricity in China is 28.04% cheaper then the US average.   Some states have lower costs and the cost is only about 12% cheaper.

While significant I'd think the lack of labor laws, environmental laws and the myriad of other govt regulations is much more significant.

Aluminum production is very energy intensive. Cost of energy is a big part of its cost. And how does one really know what China's energy costs are? It subsidizes the industries it wants to capture.

[driftdiver]

Aluminum production is very energy intensive. Cost of energy is a big part of its cost. And how does one really know what China's energy costs are? It subsidizes the industries it wants to capture.

@DB
yes it does and taxes imports of the same.

They also spend a lot of money on lobbyists in our Congress to push laws favorable to them.   I'd imagine they also pay for internet trolls to help sway public opinion.

[EasyAce]

Scotch doesn't come in cans.

No, but if you like a Scotch and soda, club soda comes in cans as well as bottles.

And if you like to cook (and I do), a lot of good ingredients come in cans, too. Not to mention my dogs' favourite
wet dog foods. And one of my favourite coffees (Chock Full o'Nuts) still comes in aluminum cans.

[guitar4jesus]

Beautiful.  Absolutely Beautiful g4j

@Wingnut

[Restored]

Growlers are the best.

[IsailedawayfromFR]

Aluminum is expensive in the US to produce because of energy costs.

Lower energy costs and the US could be competitive on its own.

The environazis have done everything in their power to make energy more expensive. This is just one of the consequences.

Where did you read this?  Americans enjoy some of the most abundant and lowest priced energy in the world. @DB

[Frank Cannon]

Scotch doesn't come in cans.

Fred's Blended 3 Month Aged Scotch comes in a 40 ounce can.

[Frank Cannon]

I drink my beer from bottles.

So do most normal people.

[jpsb]

The aluminum smelting firm Ormet has announced that following an Oct. 2, 2013, ruling by the Public Utilities Commission of Ohio (PUCO) denying the aluminum producer a request for an energy transition plan, it will close its aluminum smelter, in Hannibal, Ohio, where the company is headquartered. Ormet had sought an arrangement that would have allowed it to operate while constructing an on-site natural-gas-based power generation facility.

Ormet says that in light of PUCO’s decision, it will not be able to emerge from bankruptcy protection and will immediately shut down operations.

The company adds that it filed for bankruptcy protection Feb. 25, 2013, in light of low metal prices and exceedingly high and uncontrollable power costs. The Ohio Power industrial rate, which establishes the base rate for Ormet to procure power, has increased from $39.66 per megawatt hour (MWh), when the unique arrangement was established in 2009, to $60.83 per MWh in September 2013, an increase of more than 53 percent. During the same period, wholesale power costs in the region have decreased by more than 10 percent, the company says.

http://www.recyclingtoday.com/article/ormet-closing-ohio-aluminum-smelter/

[jpsb]

Giant pile of aluminum was discovered two years ago in central Mexico - Measures one million metric ton; six per cent of world's aluminum stock - Industry exec is convinced it is related to Chinese billionaire Liu Zhongtian - Believes China has been routing aluminum through Mexico to avoid tariffs



http://www.dailymail.co.uk/news/article-3784270/Chinese-billionaire-hid-2-billion-aluminum-stockpile-Mexican-desert-claim-American-rivals.html