Favorite beer, pop costs more; government can help
Record inflation is hurting the American economy, and businesses and consumers are paying the price.
The Bureau of Labor Statistics reported an 8.3% inflation rate as of May, marking the highest rate in the United States in decades.
Inflated prices subsequently fall heaviest on consumers, as demonstrated in the case of aluminum. Recent research suggests that eliminating harmful tariffs would reduce the cost of critical raw goods like aluminum and drive down inflation.
Fortunately, U.S. Senators Pat Toomey (R-PA.) and Mark Warner (D-VA.) are proposing to eliminate Section 232 aluminum tariffs in order to provide muchneeded relief for American consumers.
Across Ohio, residents have endured economic hardship caused by runaway inflation.
Year-to-date inflation is over 8% and unemployment has not returned to pre-pandemic levels. High inflation has particularly hurt aluminum, and this dynamic is emblematic of Ohio’s general economic challenges.
Ohio’s alcoholic and non-alcoholic beverage makers rely on aluminum as an efficient and sustainable means to deliver the products consumers love.
The sector is rapidly growing and impacts sectors across the economy. We are a major economic driver in the Buckeye state, proudly supporting thousands of jobs, contributing billions of dollars of tax revenue, and generating a direct economic impact of $7.5 billion.
High aluminum prices raise the cost of canning and distribution, harming the manufacturing sector as a whole.
Over the past few years, aluminum climbed from $1,600 per ton, to over $3,000 per ton.
The high cost of raw goods increases the cost of fundamental operations such as producing cans and developing new storage facilities. Increased operating costs leads to possible job loss or closures. As a result, businesses are forced to raise their prices in order to remain open, and our customers are left to pay the bill.
These tariffs are particularly detrimental, as imported aluminum is central for domestic industry. The manufacturers of aluminum food containers, beverage cans, and bottles use a combination of recycled aluminum, scrap aluminum, and imported primary aluminum for their products.
Primary aluminum used in cansheet is not widely available in the United States because U.S. aluminum smelters choose to produce other alloys that are more profitable. As a result, the overwhelming majority of aluminum used to produce rolled cansheet must be sourced from companies outside the United States. Domestic companies have been forced to rely on imported, heavily taxed, aluminum to create crucial everyday goods.
The American Security Project recently published a paper linking tariffs to high aluminum costs. The American Security Project notes the economic significance of aluminum as a central mineral for crucial economic sectors. They recommend that Congress repeal Section 232 in order to reduce inflation and benefit consumers and businesses.
The American Security Project’s recommendations also include an environmental angle in addition to their economic considerations. Cheap Chinese aluminum that is common in the American market is produced using carbon-intensive, coal smelters; the American Security Project suggests that Congress alter tariffs to favor low-carbon aluminum forged with renewable hydropower.
Supporting low-carbon aluminum would simultaneously reduce the price of aluminum in the United States while establishing sustainable practices throughout the industry.
Senators Toomey and Warner are working across party lines to eliminate Section 232 tariffs.
Repealing these taxes is good news for struggling Ohio businesses, such as alcoholic and non-alcoholic beverage manufactures and distributors, which are dependent on imported aluminum.
Kimberly Mcconville is the executive director of the Ohio Beverage Association.