President Trump's Policies Could Increase Beer Prices

Sourcing restrictions could hinder production.

Since taking office in January, Donald Trump has not shied away from sharing his thoughts on overseas sourcing and the trade imbalance.

These policies were put on display when he asked the Department of Commerce to look into aluminum imports back in April. Although the Presidential request focused on the ability of American aluminum manufacturers to supply enough material in the event of a major war, those dependent on aluminum cans read between the lines.

The President has repeatedly threatened to impose tariffs that would increase the cost of imported materials, like aluminum. The thought being that when more American companies buy from American manufacturers, more American manufacturing jobs can be created and maintained.

However, when American manufacturers are not capable of meeting the demands of American companies, those same jobs could actually be put at risk.

This is why a number of prominent breweries and soda manufacturers reached out to the President last week, warning about the impacts of protectionist trade policies. Namely, the cost of beverages that use aluminum cans – like beer and soda, would increase significantly if tariffs were imposed on imported aluminum. And because consumers typically don’t like to pay more for stuff, jobs could be put at risk.

According to the Can Manufacturers Institute, U.S. companies produce more than 96 billion aluminum cans every year, with 82,000 jobs tied to this production.

A key ingredient needed for producing all these cans is bauxite. And although bauxite is available in the U.S., there is nowhere near enough available domestically to meet demand.

Also, according to an article on reason.com, even if every smelter ran at full capacity, the U.S. would still have to import more than 80 percent of its aluminum supply to make sure there were enough cans. The bottom line is that it’s not only cheaper to import bauxite that has been processed into aluminum, it’s simply necessary in order to maintain market stability.

The White House was originally expected to release its aluminum trade policy in June, but has been delayed to the end of the summer. So, you might want to get those cans of High Life for the Labor Day cook-out sooner than later.


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