Ron Kind decries Trump renewal of aluminum tariffs as blow to Wisconsin breweries
National shortage of aluminum cans already is flattening beer production, analysts say
LA CROSSE, Wis. (WKBT) — U.S. Rep. Ron Kind denounced President Donald Trump’s announcement Thursday that he is renewing a 10 percent tariff on Canadian aluminum as a blow to Wisconsin’s beer industry.
The La Crosse Democrat also said the action breaches United States-Mexico-Canada Agreement that went into effect July 1. Reached in May 2019, the USMCA dropped tariffs on steel and aluminum.
During a campaign speech at a Whirlpool plant in Clyde, Ohio, Trump accused Canada of breaking a vow not to flood the U.S. market with the Canadian metal.
“Canada was taking advantage of us, as usual,” Trump said. “The aluminum business was being decimated by Canada, very unfair to our jobs and our great aluminum workers.”
On the advice of U.S. Trade Representative Robert Lighthizer, Trump said, he signed a proclamation earlier in the day to put a 10 per cent tariff back on raw aluminum from Canada as of Aug. 16.
“President Trump’s announcement today to raise tariffs on Canadian aluminum is extremely disappointing,” Kind said in a news release. “This is not how we treat allies that we have recently agreed to a new trade deal with.”
What’s more, Kind said, “These tariffs will also disproportionately harm Wisconsin’s storied beer industry, which is already facing weakened demand due to a national shortage of aluminum cans and a stagnant economy.”
A 2019 Beer Institute study found that the beer industry affects 62,856 jobs in Wisconsin, and the industry contributes $9 billion annually to the state.
More than 50 percent of U.S. aluminum is imported from Canada, and more than half of the beer produced in America annually is packaged in aluminum cans or bottles.
The aluminum can shortage also is resulting from two unexpected market influences, according to beer industry analysts.
• COVID-19 shutdowns that have pushed consumers away from bars and restaurants also have led to increased consumption of canned beer and soda at home. In bars, those drinks normally are on tap or in bottles, according to Business Insider.
• The popularity of hard seltzers opened an unforeseen demand for aluminum cans for those drinks, Business Insider reported. It cited White Claw and Truly in particular, but increasing numbers of such seltzers have hit the shelves from beer brands jumping on the bandwagon.
CNN Business reported that can shortages have prompted beer producers, including Molson Coors, Brooklyn Brewery and Karl Strauss to decrease production of certain brands.
Analysts at the Evercore investment banking firm also are warning that consumers might see some of their favorite beers go out of stock, Business Insider reported.
“From what we can piece together, everyone is now having issues meeting demand, and there is fear of lost business to wine and spirits,” analysts Robert Ottenstein and Eric Serotta wrote in a research note.
They warned about “rampant and unprecedented” stock shortages, Business Insider quoted CNN as reporting.
Jean Simard, president of the Aluminum Association of Canada, said Trump’s tariff decision will destabilize Canada’s industry and supply chains in an already shaky economy that is struggling because of the COVID-19 pandemic.