by Phil Kerpen
Excerpt from USA Today:
The Iran war has sent prices of steel and aluminum steeply higher globally due to shipping and supply disruptions. Nowhere is the impact felt more than in the United States, where every movement in world prices is amplified by 50% tariffs.
Those tariffs have impacts in a place the president might not have even considered: the price of canned food and beverages at the grocery store.
Tinplate steel ‒ essential for food cans containing soup, beans, tomatoes, fruits and other staples ‒ is a niche product. It’s produced by coating hot-rolled steel sheets with a thin tin layer for corrosion resistance, allowing varied thicknesses and widths for two- and three-piece cans suited to diverse foods.
Domestic production of this type of steel meets only about 30% of demand, coming from two producers, U.S. Steel and Ohio Coatings Co. There is no near-term prospect for increased U.S. production, and the 50% tariff on foreign steel has been mostly passed through in the form of higher prices on products that use these types of cans.
These costs add hundreds of millions of dollars each for brands like Campbell’s, Kraft Heinz and Conagra.
Plant closures are happening: Del Monte Foods shut its cannery in Modesto, California, earlier this year, eliminating 600 full-time and up to 900 seasonal jobs.
Odus Hall, a union representative at the now-shut-down plant, pointed out that “all that tariff did was increase the cost of canned foods, making it that much more difficult for them to compete in the market against imported peaches that come in already canned.”
Got that? Tariffs have made it more expensive to can and sell American-grown foods in America than to import foods grown and canned abroad.
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