US aluminum tariffs to take toll on American businesses

Global Business

Trump’s proposed tariffs are set to go into effect next Friday. The move is aimed at reviving the U.S. manufacturing industry.

At the same time, it will raise costs for metal companies, and consumers will see prices increase.

CGTN’s Hendrik Sybrandy reports.

At Oskar Blues Brewery in Longmont, Colorado, 300 cans of beer go speeding down the line each minute. Oskar Blues is the first American craft brewery to can its own beer.

Cans are more recyclable than glass bottles, the company says, and also keep beer fresher longer.“It completely eliminates oxygen, eliminates light, which are both damaging for beer,” Chad Melis, Oskar Blues’ Marketing director said.

Up the road in Fort Collins, Colorado Metal Manufacturing, a custom fabrication shop, does a range of jobs for mostly industrial clients.

“Projects that are a little more complicated than a lot of shops are equipped to do,” Gregg Danson, Colorado Metal Manufacturing’s owner said.

Both companies rely on aluminum for their production, a material that’s about to get more expensive.

“Anytime you have an unexpected hike in your cost of doing business, obviously it hurts, you know?” said Melis.

A new 10 percent tariff on imported aluminum is President Trump’s attempt to make the American aluminum industry more competitive with lower cost material made overseas.

“The workers who poured their souls into building this great nation were betrayed, but that betrayal is now over,” U.S. President Trump said recently. “I’m delivering on a promise I made during the campaign, and I’ve been making it for a good part of my life.”

“It’s about protecting some American jobs, but as an economist I believe this is bad economics,” Alexandre Padilla, Associate Professor at Metropolitan State University of Denver said.

He said the tariff will make a number of aluminum products more expensive, thereby threatening jobs in those industries. Retaliatory tariffs from affected countries are another possibility.

“Consumers are the ones who are going to pay the bill ultimately, in one fashion or another,” said Padilla.

Oskar Blues estimates it will cost 400-thousand dollars a year more to buy its cans, some of which are also filled with free drinking water for communities in need.

“I think it’ll make it a little more challenging for us to grow, add jobs, invest in the communities where we have breweries,” Melis said.

Beer could also become more expensive, he added.

“Most people aren’t thrilled with the cost increase,” said Danson, referring to his customers. He said aluminum prices began climbing before the tariff announcement. That’s forced him to revise quotes already given for upcoming jobs.

Aluminum-related orders are down significantly. He wonders how his small company will be affected.

“I think my job’s pretty secure, but what about my guys?” he said. Yet Danson is torn. As a self-described buy American guy, he wants to see U.S. aluminum producers get back on their feet. But he thinks it won’t happen overnight.

“I think the supply is going to be short, the cost of material is going to be high,” he said. Danson expects turbulence and uncertainty to mark this part of the economy for some time to come. “Cross our fingers, put the seat belt on,” he said. “Going to be a wild ride.”