Can the Aluminum Tariffs to Help American Workers
Wednesday evening, President Joe Biden gave his first address to a joint session of Congress to reiterate his legislative priorities as he marks his first 100 days in office. As we push to a return to normal and recover from the COVID-19 pandemic, the Biden administration can provide immediate stability and relief to struggling American businesses, workers and consumers by repealing the tariffs on aluminum.
According to the latest study conducted by Harbor Aluminum on behalf of the Beer Institute, from when the tariffs went into effect in March 2018 through December 2020, America’s beverage industries paid an additional $848.6 million in tariffs on the aluminum they purchased. I have heard from brewers large and small across the country who have seen their costs drastically increase because of the tariffs. The tariffs have forced brewers of all sizes to rethink their growth and long-term investment plans, which is precisely the opposite of what our economy needs right now. For example, Summit Brewing in St. Paul, Minnesota, had to reduce hiring and cut back on new projects because the implementation of the tariffs drove up the cost of aluminum.
The additional costs created by the tariffs were magnified by the pandemic's devastating impact on the hospitality sector. With little to no option to purchase beer on tap at a local restaurant or bar, consumers redirected their spending to packaged beer available at convenience stores and supermarkets. Aluminum is the single most significant input cost for brewers, and the pandemic caused demand for aluminum to skyrocket.
In 2020, approximately 70 percent of all beer sold in the U.S. was packaged in aluminum, the highest level it’s ever been. Last year, while America’s brewers purchased four billion more cans than they did in 2019, it wasn’t enough to prevent out of stocks. Complicating the increased demand for aluminum cans is the ongoing global cansheet shortage. There is not nearly enough domestic aluminum cansheet production in the United States to satisfy the beer industry's growing need. Companies are forced to procure aluminum on the global market to prevent shortages and to continue to support the nearly 2.1 million jobs the beer industry creates in the U.S.
The Biden administration has an excellent opportunity to help American workers and job creators, including the beer industry, by removing these tariffs. Nearly $20 billion in retail beer sales were lost due to the pandemic, resulting in a decline of more than 560,000 American jobs that depend on our nation’s beer industry. Lifting the aluminum tariffs will bring immediate relief to our nation’s brewers, which in turn will help spur the return of our country’s bars, restaurants, concert and sporting venues as they begin the recovery process.
As our nation comes together amidst a health and economic crisis, we must ensure our trade policy is not adversely impacting the recovery of our country’s manufacturing sector, including the American beer industry. Immediate removal of the tariffs will help rebuild our economy and protect the millions of jobs reliant on American manufacturing.
Jim McGreevy is president and CEO of the Beer Institute, a national trade association for the American brewing industry, representing brewers of all sizes, as well as beer importers and industry suppliers — an industry that supports more than 2.1 million jobs and provides more than $328 billion to the American economy. First founded in 1862 as the U.S. Brewers Association, the Beer Institute is committed today to the development of sound public policy and the values of civic duty and personal responsibility. For additional updates from the Beer Institute, visit its website, follow @BeerInstitute on Twitter, like the Beer Institute on Facebook, and follow the Beer Institute on Instagram.
