Beer drinkers and car buyers would be among those hurt by Trump’s steel and aluminum tariffs
President Trump announced Thursday that next week he will sign off on a 25% tariff for imported steel and a 10% tariff for imported aluminum. The decision was met with objections from manufacturers in numerous industries and many fellow Republicans.
Here’s a look at some of the groups that would win and lose under Trump’s plan.
U.S. steelmakers and aluminum producers. Companies that have cut production and employees as a result of imports may now have reason to restart their production lines.
Chicago-based Century Aluminum, whose products include the high-purity aluminum needed to make military fighter jets, shut down some production lines at its Hawesville, Ky., smelter in late 2015. Chief Executive Michael Bless told Reuters last week that tariffs or import quotas would enable it to move back toward full production and rehire 350 workers at that facility. Its shares rose 7.5% on Thursday.
Major steelmakers such as Nucor and U.S. Steel — as well as companies that manipulate steel into flat bars, coils and other finished steel products — are also in this category.
Automakers and other manufacturers. Companies that buy steel — such as automakers — will see higher prices for steel, and they could pass those price increases on to consumers.
“The direct effect of a tariff on imported goods is generally to raise the production cost for businesses that use those goods … as well as to raise the price for final users that consume them as end products,” said Brent Neiman, professor of economics at the University of Chicago’s Booth School of Business.
The American Automotive Policy Council, which represents General Motors, Ford and Fiat Chrysler, warned in a statement last month that tariffs on steel and aluminum would lead to higher prices for the materials in the U.S. compared with what foreign competitors pay. “This would place the U.S. automotive industry, which supports more than 7 million American jobs, at a competitive disadvantage,” Matt Blunt, the council’s president, said in a Feb. 16 statement.
All three automakers’ stocks fell Thursday.
Brewers and beer drinkers. Brewers, which sell an increasing amount of beer in aluminum cans, worry the tariffs will usher in higher costs and supply limitations.
Trump’s planned tariff “will cause aluminum prices to rise and is likely to lead to job losses across the beer industry,” Gavin Hattersley, CEO of Chicago-based MillerCoors, said in a statement. “We buy as much domestic can sheet aluminum as is available. However, there simply isn’t enough supply to satisfy the demands of American beverage-makers like us.”
The Beer Institute, which represents beer producers and importers, including MillerCoors and Constellation Brands’ Chicago-based beer division, said the 10% tariff on aluminum would cost the industry $347.7 million and more than 20,000 jobs.
Buyers of canned food. The tin cans that most vegetables, fruits, beans and other processed foods are sold in are made out of tinplate steel, but only 58% of domestic demand can be met by U.S. tinplate producers.
“We need that foreign metal. The concern is we won’t have enough metal for product, and there would potentially be a product shortage,” said Nick George, president of the Midwest Food Products Assn., a trade group that advocates on behalf of food processing companies and related industries in Illinois, Minnesota and Wisconsin. “Will it raise prices? That is the concern.”
General contractors. The tariffs will have an almost immediate impact on the cost of steel purchased for construction projects, whether it’s rebar for highway projects or structural steel used in commercial projects, said Ken Simonson, chief economist for the Arlington, Va.-based Associated General Contractors of America.
“Steel is pretty ubiquitous in construction,” Simonson said. “It would affect the cost of pretty much every construction project, ranging from a single-family home to a refinery to a bridge.”
Aluminum is also used in construction, often in siding and architectural elements, Simonson said.
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