May Affect Aluminum Can, Boat Producers
Legislation introduced in the House of Representatives in April (HR 2698) as well as a similar bill in the Senate (the Aluminum Pricing Examination Act or APEX) sponsored by Senators Tom Cotton and Tammy Baldwin would be tied to efforts to repeal tariffs on imported aluminum that have been in place since 2018 under the Trump administration.
Some manufacturing groups have pushed for legislation of this type including the Beer Institute (and five others) claiming that aluminum prices have been inflated as a result of tariffs (known as Section 232 tariffs) and have cost manufacturers million of extra dollars.
The report in the Recycling News cites a study by Harbor Aluminum, a company based in Texas the conclusion of which was that tariffs imposed from 2018 through the end of 2020 (the end of the study’s period) cost aluminum users like beer and soda producers in excess of $800 million, nearly 1 billion in extra costs.
COVID’s Effect on Aluminum Prices
While the Trump-era Section 232 tariffs (which imposed a 10% tariff on imports of the metal) may have caused an uptick in pricing, so too did an increase in demand fueled by of all things the COVID-19 pandemic. Apparently so many people were now staying home the beverage consumption grew. More stay at home workers were drinking more sodas (or beer?) during the day that it was enough to drive prices of aluminum up.
Of interest to the Beer Institute as well as other groups promoting the legislation is that the law, if passed, is additional transparency regarding aluminum pricing methodology. The CEO for the Consumer Brands Association added that he welcomed the legislation since aluminum is responsible for so much in the packaging industry. Getting a handle on the cost of this metal for aluminum consumers (those who use aluminum in manufacturing) would help keep costs in check and ultimately help keep manufacturing jobs stable.
For those interested in the complete language of the house resolution/APEX Act, you can find it here.