Coca-Cola, Pepsi and AB InBev have written the president asking for exemptions from proposed tariffs.
Two of the Trump administration’s biggest talking points have been boosting struggling U.S. industries and improving national security. Though topics like coal and terrorism typically dominate these discussions, the repercussions can be more wide-ranging that you might realize – like a potential increase in the cost of canned beer and soda. Yes, really.
Last week, over 30 prominent executives in the beverage business – including from often competing groups like both Coca-Cola and Pepsi, and both Anheuser-Busch and the Brewers Association – cosigned a letter to the president requesting that President Trump exclude the aluminum imported to produce cans and bottles in his administration’s “Investigation on the Effect of Imports of Aluminum on US National Security.” The concern is that the president may be on the verge of enacting new tariffs, taxes or import restrictions on aluminum that would drive up the overall cost of aluminum products, including cans. Beverage brands warn that they would then likely have to pass these expenses on to consumers.
What does aluminum have to do with national security to begin with? Well, trying to circumvent politics as best as possible, here is how the White House presents it: America’s aluminum industry has shrunk. Only five aluminum smelters currently operate in the U.S. As with many industries, pressure from cheaper, imported goods is one of the biggest reasons. According to the White House, some of that ability to undercut the U.S. comes from “foreign government subsidies and other unfair practices.” Regardless of the cause, the president argues that a weak aluminum industry is bad for national security because the metal is commonly used by the defense industry.
But the beverage industry wants to parse apart different types of aluminum. “We are concerned that the scope of this investigation will include aluminum that has no national security application, such as rolled can sheet and the primary aluminum which is processed into aluminum food, beverage cans and bottles, lids and closures,” their letter states. Furthermore, they point out that the kinds of aluminum they would like to see exempted from tariffs are “not widely available in the United States because U.S. aluminum smelters choose to produce other alloys that are more profitable.”
The extent to which national security is really an issue as opposed to a convenient framing device to try to bolster the U.S. aluminum industry is certainly up for debate. But for many Americans, an increase in the cost of beer and soda could have an effect their day-to-day spending, and that’s exactly what the beverage industry says one of the major repercussions of these decisions would be. “This would ultimately harm US consumers, who would pay more for canned beverage products,” said the Can Manufacturers Institute. It's perhaps the first time in history the question has been posed as "would you rather have stronger national security or cheaper beer?"