Thursday, March 1, 2018

Beer Brewer MillerCoors Slams Trump's Aluminum Tariffs

Here is just one example of how Trump's new tariffs will increase prices and shrink the economy.

Beer brewing company MillerCoors came out against President Trump’s decision to raise tariffs on aluminum, warning that “American workers and American consumers will suffer” over the move.

“Like most brewers, we are selling an increasing amount of our beers in aluminum cans, and this action will cause aluminum prices to rise. It is likely to lead to job losses across the beer industry,” the company said in a statement on Twitter.

The brewer said it purchases as much aluminum domestically as it can, but that “there simply isn’t enough supply to satisfy the demands of American beverage makers like us.”

“American workers and American consumers will suffer as a result of this misguided tariff,” the company said.


(source: The Hill)


  1. That's not an example. That's posturing.

    How much will a 10% increase (assuming the tariff confers a 100% benefit to domestic producers) in the price of aluminum affect the price of a six pack? How much benefit does the same beer maker obtain from the roughly 33% decrease in corporate taxes? The only honest answer is, we don't know what the net effect of tariffs will be at all, from planes to cans. You can't even say it's a certainty that end-user price increases will happen, or that they will outpace wage increases, which are already happening.

    1. A tariff is artificially-produced and enforced scarcity on the home country. Scarcity and fewer choices are a bad thing. Ergo tariffs are bad.
      Wasn't it Henry George who observed "What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war."

    2. Shimshon, this is why economic theory is important, and one cannot just look at (indeed, one should not even look at) observable consequences to assess impact. A tax on factors of production increases the cost of production and, all else being equal, would reduce supply through impacting the marginal supplier. Yes, there may be offsetting factors elsewhere in the economy, such that the observable net impact is neutral or even positive. But the point of economic theory is to demonstrate the isolated impact of something like a tax; put another way, if all those other factors are present but there were no tariff, then the neutral to positive net impact would have been positive to more positive.

    3. Excuse me. Bob isn't basing his prediction of an increase in prices on theory. He's basing it on the statement of an aluminum consumer. The isolated impact of policy change is irrelevant. Maybe prices will go up for beer consumers. Maybe they won't. Yes, it is likely, though not certain, that raw aluminum prices will go up. That is the only genuinely economic prediction Bob or anyone can make. How far that trickles through the chain of production is completely unknown at this point. Will CANNED BEER prices go up? I don't know, and neither do you. The marginal cost increase in metal per can will be absolutely trivial no matter what.