The Impact of New Metal Tariffs on American Canned Foods, Beverages, and Cars
On Wednesday, a 25% tax on all imports of steel and aluminum was enacted in the US, concluding previous exemptions from major trade partners like Canada, Mexico, Brazil, and the European Union. This policy change, announced by President Trump, intends to increase costs for US businesses reliant on imported metals. Key industries affected include canned food manufacturers, brewers, and automotive companies.
Canned Foods: Approximately 70% of the steel used for making food cans in the US is imported, with major suppliers being countries like Germany and Canada. The Can Manufacturers Institute (CMI) voiced concerns that without exemptions, grocery prices for canned foods will rise, with advocates arguing that the move undermines food security. Major companies such as General Mills and Goya have supported the call for tariff exemptions.
2. Beverage Industry: Similarly, brewers and soda manufacturers like Coca-Cola are wary of rising costs due to tariffs on aluminum. Coca-Cola’s CEO stated they would need to adapt to these changes but acknowledged the likelihood of increased customer prices.
3. Automotive Sector: Car manufacturers, including Ford and General Motors, predicted significant cost increases, with estimates suggesting a $1 billion rise in operational costs for each company due to the tariffs. Analysts project car prices could rise by $3,000 if broader tariffs on goods from Canada and Mexico are enforced.
4. Construction Costs: The construction industry, a major user of steel, has also spoken out against these tariffs, warning that it could escalate housing costs and impede development. The National Association of Home Builders urged for building materials to be exempt due to potential home price increases.
Overall, companies across sectors anticipate passing on the tariff-induced costs to consumers, leading to higher prices for essential goods, including canned food, beverages, and automobiles, which may strain consumer affordability.