Price of canned beer — and other goods that rely on steel and aluminum imports — to rise as tariffs on U.S. allies go into effect
Bob Pease spent Thursday on Capitol Hill in Washington, D.C., making a last-ditch attempt to persuade policymakers to help craft brewers fend off rising costs when new tariffs on steel and aluminum go into effect Friday.
“The opposition to the tariffs was our second-biggest ask for people on the Hill today,” said Pease, president of the Brewers Association, the Boulder-based organization representing craft brewers. (The first was to ask that a lowered federal tax on small brewers be made permanent.) “With this administration, you can never say anything is too late or too early or too anything. Who really knows? But it sounds like they’re going to move forward, and this will certainly have a negative effect on the beer industry.”
It’s not just canned beer that could see a price hike, but the tariffs — 25 percent on steel and 10 percent on aluminum — will impact the profits of many businesses, from chain-link fences to public and private construction projects. President Donald Trump supported tariffs to reinvigorate the nation’s locally made steel and aluminum industries and strengthen national security by creating a domestic supply.
But as industries such as beer makers protested in April, Trump postponed tariffs for a month on U.S. allies Mexico, Canada and the European Union. The month is now over.
“Ten percent tariffs is going to equate to some multimillion dollar tax on the beverage industry, and it is certainly possible that there will be jobs lost,” Pease said. “It’s hard to see where aluminum made for can-making has a national security implication.”
Local steelmakers, however, have thrown their support into the tariffs. EVRAZ North America, which operates a mill in Pueblo, told the Pueblo Chieftain in March that it supports the Trump administration’s “efforts to stop unfair and illegal imports of dumped and subsidized steel into the U.S.” EVRAZ added: “These imports hurt the domestic industry and cost hundreds of jobs.”
At Broomfield-based Ball Corp., which produces about a 100 billion cans a year globally, officials had hoped Trump would exclude aluminum sheets used for food and beverages from the tariff. The company kept talks open with government officials, customers and suppliers that exclusions needed to be pursued, said Renee Robinson, Ball’s director of corporate communications.
“We continue to believe that tariffs on steel and aluminum will harm the U.S. economy, American workers and raise prices for consumers for many products including food and beverage cans,” Robinson said.
The tariff translates to an estimated 20 to 24 cents more per case of 24 cans, according to Oskar Blues Brewery. The Longmont brewery, which exclusively packages beer in cans except for draft beer, expects the change will also add $475,000 to $575,000 in expenses annually.
“Craft beer is already a very capital-intensive industry, (so) to instantly up our expenses due to an aluminum tariff would be at the expense of investing in growing jobs in our communities and could eventually make a price increase to the craft beer lover,” said Oskar Blues marketing director Chad Melis. “It’s a competitive time in craft beer where additional marketing investment is mandatory to stand out in a crowded marketplace, so this additional expense will impede our ability to grow.”
The stakes are high for massive public projects that are set to launch into construction across the state in the next year or two.
While the Colorado Department of Transportation says upcoming highway expansions may be protected to some extent by federal Buy American requirements for construction materials, including steel, that may not always be the case for big projects planned by the city of Denver.
The city is starting site-clearing work for the nearly $1 billion National Western Center project and is making plans for a $233 million expansion of the Colorado Convention Center, which is in the design phase. It also has several big building projects planned as part of a $937 million bond package approved by voters last fall, although the 10-year time frame on that program makes it more difficult to judge the impact.
“While I don’t have a specific number, we know the tariffs will have an impact on our program,” said Jenna Espinoza, a spokeswoman for the city’s National Western project office. “Any increase in material pricing has the ability to affect our program,” but she added that the project’s management team would work to “minimize potential negative impacts.”
CDOT has some contractual protection for the $1.2 million Central 70 project through Denver, which will widen Interstate 70 to add tolled express lanes. The project is a public-private partnership, with Kiewit Meridiam Partners taking on the risk for changes in taxation and materials pricing.
Tony DeVito, the Central 70 project director, said other CDOT projects may be more at risk, at least indirectly, despite requirements that contractors buy steel from American producers.
“It would come down to whether or not (the tariffs) shift the supply and demand among American producers,” DeVito said.