In case you somehow missed it, today is National Beer Can Appreciation Day. January 24 marks the 85th anniversary of the day the first beer cans of Krueger’s Finest and Krueger’s Cream Ale were sold to customers in Richmond, VA.
From that modest start, beer can sales took off. Today, 62 percent of all beer is sold in cans.
Unfortunately for beer consumers, the price Americans pay for beer sold in cans took a big hit in 2018 when the government imposed a 10 percent tax on imported aluminum. The tariffs were imposed based on an alleged national security threat under Section 232 of the Trade Expansion Act of 1962.
Prior to this action, the average tax rate for imported aluminum subject to Section 232 tariffs was less than one percent, based on trade data provided by the U.S. International Trade Commission. By June 2018, that tax rate had skyrocketed to 10.1 percent. Even after tariffs on imports from Canada and Mexico were lifted, aluminum buyers have continued to be pinched. As of November 2019, the last month for which data is available, the average tariff for aluminum and aluminum products covered under Section 232 remained high, at 5.8 percent.
In addition to their direct cost, the tariffs have triggered a dispute over aluminum pricing. This issue is addressed in the Commodities Future Trading Commission Reauthorization Act of 2019, H.R. 4895, which includes a provision requesting additional information on aluminum pricing from the U.S. Government Accountability Office (GAO).
U.S. Secretary of Commerce Wilbur Ross argued that the impact of these aluminum tariffs would be trivial. According to Secretary Ross, “The impact on a can of beer will be a fraction of 1 percent.” Even if that number is correct, the cost is not trivial, since there are about 36 billion aluminum cans and bottles of beer sold in the United States every year. So far, aluminum tariffs imposed under Section 232 have cost Americans more than $1.9 billion.
The federal government should eliminate Section 232 aluminum tariffs. Next year, National Beer Can Day should no longer be marred by taxes that drive up costs for beer producers and, ultimately, their customers.