By proposing tough new tariffs on aluminum and steel, U.S. President Donald Trump may unintentionally pressure American companies to boost the prices of cars, trucks and 12-packs of beer.
Companies that rely on international imports of the metals rushed Thursday to urge the president to pump the brakes on his proposal, which some analysts warned could spark all-out trade war.
Among the critics were large-scale beer companies and automobile makers.
The U.S.-based beer institute issued a stern warning to Trump, warning the president that the “draconian” tariffs could have serious repercussions for everyday Americans.
"Aluminum used to make beer cans is not a national security threat. Aluminum is critical to the well-being of America's beer industry as more than half of the beer produced annually is packed in aluminum cans or aluminum bottles,” Jim McGreevy, president and CEO of the Beer Institute, said in a statement.
MillerCoors, the company that brews Coors Light and Miller Lite, called Trump’s move “misguided” and said that a tariff imposed on other countries would lead to job cuts within the U.S.
“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. American workers and American consumers will suffer as a result of this misguided tariff,” the company said in a tweet.
The move could also force American consumers to pay more for cars and trucks, the American International Automobile Dealers Association said in a statement.
“These proposed tariffs on steel and aluminum imports couldn’t come at a worse time,” said AIADA President and CEO Cody Lusk. “Auto sales have flattened in recent months, and manufacturers are not prepared to absorb a sharp increase in the cost to build cars and trucks in America.”
Trump unveiled the trade bombshell Thursday morning: a 25 per cent tariff on steel and a 10 per cent tariff on aluminum.
The fine print of Trump’s plan remains scarce, and it’s unclear whether Canada will be slapped with the proposed taxes. The president said he will reveal more details next week.
In the meantime, Foreign Affairs Minister Chrystia Freeland called the proposal “absolutely unacceptable.”
"Should restrictions be imposed on Canadian ... products, Canada will take responsive measures to defend its trade interests and workers," she wrote.
Marvin Ryder, an assistant professor at the McMaster University DeGroote School of Business, said Trump’s move was a direct play to his political base, some of whom work in America’s Rust Belt.
Regardless, Ryder said he doesn’t expect Canada will be included in the tariffs, which he believes were likely meant for countries such as China, Russia and India.
“I’m buoyed by the fact that the Secretary of Defence, former General (Jim) Mattis, actually said he views Canadian steel and aluminum as a strategic asset of the Armed Forces in the United States. That’s why I think we’re likely going to get an exemption,” Ryder told CTV News Channel.
MillerCoors statement: We are disappointed with President Trump’s announcement of a 10% tariff on aluminum. While we won’t know the details for a week, the Department of Defense recently reported that aluminum does not cause any national security issues. (1/3)
— MillerCoors (@MillerCoors) March 1, 2018
Like most brewers, we are selling an increasing amount of our beers in aluminum cans, and this action will cause aluminum prices to rise. It is likely to lead to job losses across the beer industry. (2/3)
— MillerCoors (@MillerCoors) March 1, 2018
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. American workers and American consumers will suffer as a result of
— MillerCoors (@MillerCoors) March 1, 2018
this misguided tariff. (3/3)
With files from The Canadian Press
