Why Trump's tariffs on metal are bad news for beer drinkers

Beverage makers love aluminium cans because they chill quickly, stack easily and keep light out (something that's especially important for beer). New production techniques mean the cans can be made with less and less aluminium. The wall of a can is 0.097 millimetres thick — about as thick as a human hair.

Aluminium produced in the United States would not be subject to the tariff, but the US imports most of its aluminium. In 2016, 52 per cent of aluminum for domestic consumption was imported, up from 11 per cent in 2012, according to Interior Department statistics. Canada is the leading source.

But recycling is an essential part of the aluminium story. The metal is 100 per cent recyclable — it can be remelted and used over and over — and is one of the most commonly recycled commodities. A typical aluminium can contains 70 per cent recycled metal, the Aluminum Association said.

Within hours of Trump's announcement of a tariff, big brewers responded. After all, about 60 per cent of beer in the US is packaged in aluminium.

The Beer Institute, a trade group, said the 10 per cent tariff on imported aluminium would amount to a $US347 million ($436 million) tax on the beverage industry. It estimated that higher expenses and lost sales would force the layoff of about 20,300 workers.

'Workers and consumers will suffer'

"Like most brewers, we are selling an increasing amount of our beers in aluminium cans, and this action will cause aluminium prices to rise," MillerCoors, maker of Coors, Miller High Life and dozens of other brands, said in a tweet storm. "It is likely to lead to job losses across the beer industry."

The company went on to say it buys as much aluminium as it can from domestic products.

"However, there simply isn't enough supply to satisfy the demands of American beverage makers like us," the company said.

"American workers and American consumers will suffer as a result of this misguided tariff."

A beer can costs about 10 US cents to make, the Beer Institute said.

In the unlikely event that the can is made entirely of imported aluminium — no recycled or domestic content — the 10 per cent tariff might add a penny to the cost, or 6 US cents to a six-pack. That's probably not enough to drive away many beer drinkers.

That is not to say brewers and other beverage makers may not be penalised for using aluminium cans. Scores of industries, from automakers (Ford placed a big bet on aluminium with its F-150 truck) to sweets makers (Hershey buys acres of foil to wrap its Kisses), could face unexpectedly higher costs because of the administration's decision.

The impact on individual consumers, however, may take more time to gauge.

The New York Times