This tariff could drive up grocery costs for NJ families
One Ohio-based company is so eager to reap a regulatory windfall in profits that it’s ready to make American consumers — including millions here in New Jersey — pay more for basic necessities at a time when many are struggling.
Steelmaker Cleveland-Cliffs is urging the federal government to slap tariffs on imported tinplate steel used for the can packaging for food, personal care and household products. The result would be higher prices at the grocery store, contributing to inflation.
Washington should reject this blatant attempt to manipulate U.S. trade regulations.
Tariffs are taxes on imported goods. Proponents say they target foreign countries for dumping goods below the cost of production, but invariably it is consumers who are the ones hit with higher prices.
Cleveland-Cliffs is lobbying the U.S. International Trade Commission for tariffs of up to 300% on tinplate imports from eight countries. In this case, however, the evidence is clear that the U.S. producer is seeking an unfair advantage by burdening its foreign competitors with higher costs.
Tariffs are terrible for the economy. They reduce GDP, stifle wages, kill jobs, create economic uncertainty and reduce business investment. What’s more, they unfailingly provoke the countries affected by tariffs to respond in kind with tariffs on U.S. exports, further reducing economic output.
Like a contagion, tariffs on imports increase the cost of goods and services that use the imports to which the tariff applies. Because tariffs act like a sales tax, they also disproportionately harm poorer Americans, who can least afford inflated costs.
In the case of tinplate steel, this would mean higher prices for everything from metal hoses, oil filters, paint trays and baking tins to aerosols like hair spray, air fresheners and cleaning products. But the most pain would be felt by Americans still struggling to pay their bills through the current epidemic of inflation, as the cost of canned items they rely on every day to put food on the table would see a marked price increase.
In New Jersey, that means over 800,000 people currently experiencing food insecurity — including nearly 200,000 children — would be hit especially hard. The number of people facing hunger statewide has increased by nearly 25% since the start of the pandemic.
Struggling households often turn to our state’s 1,500-plus food banks as a first line of support. But these charities depend on low-cost, non-perishable canned goods to feed the people they serve, and dramatic price increases on these food items means fewer New Jersey families would receive the help they need. With food insecurity on the rise, the added impact of tariffs would be tragic.
While the proposed tariffs are marketed as a way to keep out below-cost Chinese tinplate, the reality is that Chinese imports make up just about 9% of imported tinplate steel in the United States. The tariffs would do more to harm America’s relationship with several of our closest allies and trading partners, including Canada, Taiwan, South Korea, the United Kingdom, the Netherlands and Germany.
Tariffs of this magnitude on tinplate steel would also sever ties between domestic canned goods manufacturers and their overseas suppliers — who provide over 40% of the tinplate steel used to meet U.S. canned food demand. The reduction in supply would have producers scrambling all over each other to secure the Cleveland-Cliffs tinplate they need to stay in business. The sky’s the limit on how high prices will go if Washington foolishly grants Cleveland-Cliffs this market power. We could further experience supplychain shortages as domestic supplies fail to meet demand.
Former President Donald Trump’s trade wars proved just how harmful tariffs can be — for the entire U.S. economy, but especially for lower-income Americans.
Beginning in 2018, Trump imposed tariffs on products from numerous countries. The tariffs cost Americans nearly $46 billion in higher consumer costs, and Trump’s trade war with China, by some estimates, killed up to 300,000 American jobs.
Cleveland-Cliffs’ proposed tariffs would be no different. According to a recent study, they would threaten nearly 40,000 domestic can and food manufacturing jobs alone.
Americans shouldn’t be put at risk of going hungry or broke because one company wants to boost its bottom line by getting Washington to reignite a trade war.
Lawmakers should urge the Department of Commerce and the U.S. International Trade Commission to reject plans to enact tariffs on tinplate steel, lest the personal finances of many families in New Jersey and across America get dashed to pieces on ClevelandCliffs.
Gerard Scimeca grew up in Willingboro and currently serves as chairman of Consumer Action for a Strong Economy, based in Alexandria, Virginia.