US canmakers raise concerns over tariffs on aluminium and steel

US canmakers, fillers and industry organisations are raising concerns over tariffs on aluminium and proposed tariffs on tinplate.

Research from the US Beer Institute has said that aluminium tariffs continue to drive up costs for breweries and consumers. The organisation has also joined the Can Manufacturers Institute in calling on the US International Trade Commission (ITC) and Department of Commerce (DoC) to reject tariffs on imports of tinplate steel.

The Beer Institute represents the US beer industry and has been campaigning for the repeal of the aluminium tariffs as set out in section 232 of the Trade Expansion Act, which came into effect in 2018. It says the tariff has imposed US$2.175 billion in fees on the US beverage industry since it was introduced.

Brian Crawford, president and chief executive of the Beer Institute, said: “Over the last five years, the American beverage industry has paid $2bn in Section 232 aluminum tariffs, in large part due to the Midwest Premium (MWP), which allows aluminum companies to charge inflated prices with no oversight.”

He is calling for accountability, transparency and competition in the aluminium market, as he claimed the MWP was a “pricing system that allows aluminum producers to charge end-users a tariff on non-tariffed metal”.

The Beer Institute commissioned research from aluminium analysts Harbor Aluminium, which found that 6%, or $135 million, went to the US Treasury, while 94%, or $2.04bn, went to US smelters and rolling mills, and Canadian smelters.

Crawford said that the tariff has been applied on 10.295m metric tonnes of aluminium regardless of the metals’ content or origin.

Primary aluminium cansheet is vital to the US beer industry – 74% of all beers brewed in the US are packaged in aluminium cans and bottles, according to the Beer Institute.

The organisation said there were more than 6,600 breweries supporting 2.4m jobs, and contributing more than $409bn to the US economy.

Last year, the chief executives of Anheuser-Busch, Constellation Brands, Heineken, and Molson Coors, sent a letter to President Joe Biden calling on him to lift the tariff.

The letter stated that the beer industry used more than 41 billion aluminium cans annually, underlining the metal’s central place in the beverage industry.

Meanwhile, 28 manufacturers’ representatives, food retailers and agricultural organisations have written to chairman of the ITC David Johanson and under-secretary of commerce at the DoC Marisa Lago stating that tariffs on tinplate steel would increase prices on canned products by up to 30%, or $0.58, and threaten 40,000 manufacturing jobs.

The letter pointed out that domestic suppliers of tinplate can only meet 50% of total US demand, necessitating imports from countries such as Canada, the Netherlands, Germany and the UK.

“Can manufacturers require specific standards to ensure that tin mill steel for food cans is made to meet quality specifications to preserve brand reputation, food safety and shelf stability. Certain types of steel required within the can industry (drawn-and-ironed and certain steels for two piece and EZ Open cans), currently are only sourced through imports,” it stated.

In September, the DoC made a preliminary ruling on the proposed tariffs of 122% for China, 7% for Germany, and 5% for Canada. Tariffs on South Korea, Taiwan, Turkey, the Netherlands and the United Kingdom were removed.

The DoC is expected to finalise duty rates and hold a hearing on tinplate steel tariffs on 4 January 2024, with a final decision coming soon after.