Trump’s Tariffs Will Crush the Beer Industry

Donald Trump's plan to slap a 10 percent tariff on all aluminum imports has beer makers belching their outrage.

"President Trump's announcement today that he plans to impose a 10% tariff on aluminum imports will increase the cost of aluminum in the United States and endanger American jobs in the beer industry and throughout the supply chain," says Jim McGreevey, president and CEO of the Beer Institute, a trade association.

McGreevy called the proposed aluminum tariff "a new $347.7 million tax on America's beverage industry" and warned that imposing those added costs could trigger more than 20,000 in job losses.

"American workers and American consumers will suffer as a result of this misguided tariff," said Molson Coors, the Colorado-based macrobrewery that's one of the biggest beer makers in the world, in a statement.

According to the U.S. International Trade Commission's Harmonized Tariff Schedule, most aluminum products currently have tariffs set between 2 percent and 4 percent.

Breweries stand to be particularly hard hit by the proposed tariffs, but they are hardly the only losers. Everything produced with aluminum will become more expensive if the White House goes ahead with its protectionist plan. Manufacturers who use steel will be hit even harder if Trump decides to impose the 25 percent tariff on all imported steel that he is reportedly mulling.

Beyond Trump's nationalist nonsense, the closest thing to an actual rationale for tariffs that the administration has been able to produce is a claim that relying too heavily on imported aluminum and steel is a threat to national security. The United States needs aluminum and steel to make rockets, bombs, and other weapons of war. If the global supply of those commodities were somehow restricted, the argument goes, then it would weaken America's ability to defend itself.

That entire line of argument falls apart under even the slightest scrutiny. For example, the largest exporter of aluminum into the United States is Canada, a nation that also happens to be one of America's closest allies. Any scenario where Canada restricts aluminum exports to weaken U.S. national security is a future where Washington has far, far bigger problems than aluminum imports.

Meanwhile, the negative consequences of the tariffs are not hypothetical. In January, the Trump administration imposed new tariffs on imported washing machines. (With this, at least, thy spared us the façade of claiming that cheaper, foreign-made washing machines threaten national security.) Prices immediately increased.

The same thing will happen with aluminum and steel, except the effects will be felt throughout a much wider swath of the economy.

American workers will lose jobs. American consumers will pay higher prices. Beer will become more expensive. But at least we'll be secure against the threat of a war with Canada.