Canned soup and vegetables are displayed for sale in a New York City grocery store on Feb. 11. Some food and beverages could cost more if steel and aluminum can prices rise in response to U.S. tariffs. Spencer Platt/Getty Images hide caption
toggle caption Spencer Platt/Getty ImagesFrom soft drinks and beer to aerosols and shelf-stable soups, many everyday grocery items sold in steel and aluminum cans could be in store for a price hike.
President Trump announced this month that he planned to impose a 25% tariff on all imported steel and aluminum in a bid to boost American producers by cracking down on foreign competition.
But food and beverage industry experts warn that driving up the cost of imported steel and aluminum could make it more expensive to manufacture cans in the U.S. — a price increase that will ultimately be passed on to consumers.
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Ken Henricks, owner and president of Alter Brewing Co. in suburban Chicago, said the increasing cost of cans could hurt the craft beer sector at a time of rising inflation and growing competition from large beer companies.
"We just don't have any more room to give without raising pricing. And if we raise price, I know that with people's buying power being less today, our volumes will decrease," he said. "We're really at a tough spot."
Business Trump says he will impose a 25% tariff on aluminum and steel imports
The tariffs on steel and aluminum aren't new. In fact, it was Trump who implemented them during his first term in office. At the time, Trump put only a 10% tariff on aluminum and permitted some far-reaching exemptions to the steel tariffs, which the Biden administration kept in place. Now, Trump says, those exemptions are being removed and the aluminum tariff is being increased to 25% as of March 12.
The policy shift comes as consumers still face high costs for a range of products. Inflation rose again in January, with consumer prices increasing 3% year over year.
Steel and aluminum have a slew of uses across multiple industries, but the food and beverage business in the U.S. relies on both materials for cans.
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The U.S. produces 135 billion metal cans each year, according to industry data provided by the Can Manufacturers Institute. That includes roughly 115 billion aluminum beverage cans and 20 billion steel cans for food and other products.
American can manufacturers source raw materials from both the U.S. and abroad. While imports account for only about 10% of the aluminum used by American can-makers, some 70% of the tin mill steel used to make steel food cans in the U.S. comes from foreign sources, which means makers of steel cans could see their prices rise more sharply.
If foreign steel becomes too costly, it will be hard for American producers to pick up the slack, according to Tom Madrecki, vice president of supply chain resiliency at the Consumer Brands Association, a trade group for consumer-packaged goods.
