Congress should ensure the price brewers pay for aluminum reflects market fundamentals
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Today is Beer Can Appreciation Day. Celebrated every Jan. 24, it recognizes the day in 1935 when beer was first sold in cans.

Credit for the first steel beverage can goes to the Krueger Brewing Company of Richmond, Va. However, in 1959, Bill Coors put Coors beer in a two-piece, seamless, recyclable aluminum can — which today is the can that is synonymous with nearly all canned beverages. Instead of patenting this design, Bill Coors and Coors Brewing Company chose instead to open-source it, allowing brewers, other beverage manufacturers, and the rest of the world to use this innovation for free. This can not only revolutionized how people enjoyed beer, but it changed the beverage industry as a whole.

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Today, Americans can choose from a wide variety of beer styles made in our nation’s more than 5,600 active breweries. And the beer industry is a vital part of our nation’s economy, supporting more than 2.2 million American jobs.

Whether at a ball game or a beach, the beer can is a ubiquitous part of countless American occasions. To make sure Americans have the right beer for those occasions, our nation’s brewers package more than 60 percent of all beer produced and sold in the United States in aluminum cans and aluminum bottles. In 2017, brewers bought more than 36 billion aluminum cans and bottles, and aluminum is the single most substantial input cost in American beer manufacturing.

Because of the critical role aluminum plays in our nation’s beer industry, the new tariffs on aluminum have increased costs to brewers by $347 million, and they are endangering 20,000 good-paying American jobs dependent on the beer industry.

President TrumpDonald John TrumpTrump calls Sri Lankan prime minister following church bombings Ex-Trump lawyer: Mueller knew Trump had to call investigation a 'witch hunt' for 'political reasons' The biggest challenge from the Mueller Report depends on the vigilance of everyone MORE’s goal of bringing back U.S. manufacturing jobs is admirable and essential. However, his solution – tariffs – doesn’t get us there, and the unintended consequence of these tariffs will have an adverse effect. The American beer industry is a crown jewel of U.S. manufacturing, with two new breweries popping up every day. We will never see that kind of innovation and growth from the aluminum smelters as long as other countries, such as our allies in Canada, have lower energy and other input costs. Reports have suggested the number of jobs that could be generated by increased smelting would be less than 2,000.

Just as President Trump has helped America’s farmers mitigate some of the harmful effects of the tariffs, the president can help alleviate the negative impact that tariffs are having on our nation’s beer industry.

Last year, Canada announced it would exempt aluminum cans imported from the United States from any tariffs – a welcomed relief to Canadian brewers and soda makers. In turn, the United States could exempt can sheet from aluminum tariffs since all of our industry’s cans are manufactured right here and therefore, not an issue of national security. In 2017, American brewers spent $5 billion on beer cans, which contain about $2.7 billion worth of aluminum, of which nearly 40 percent comes from Canada. Even the Aluminum Association has said U.S. producers could not possibly meet domestic demand.

Another issue ripe for oversight is aluminum pricing irregularities due to the arcane Midwest Premium, which skyrocketed as high as 140 percent in 2018. The Midwest Premium, created by metal producers years ago, was initially intended to cover the logistical costs of moving metal into North America – essentially a shipping and handling fee. But over time, the Midwest Premium has become a device to speculate and artificially inflate the price paid for aluminum at the expense of end users like brewers.

Last Congress, a bipartisan group of legislators in the House and Senate introduced the Aluminum Pricing Examination (APEX) Act to provide the Commodities Futures Trading Commission (CFTC) the clear jurisdiction to conduct oversight and investigate price reporting and price setting entities within aluminum markets. The Department of Justice, the Department of Commerce and – if the APEX Act passed – the CFTC, could all open investigations into the pricing irregularities exacerbated by President Trump’s tariffs.

I’ve heard from small brewers in New Jersey and large brewers in Milwaukee, and they’re telling me the aluminum tariffs are increasing their costs. Each brewer will have to decide for themselves how to absorb that expense, whether it’s raising prices, laying off workers or delaying innovation and expansion, all of which are terrible options for the industry and more importantly Americans, whose favorite alcoholic beverage is beer.

As we toast Beer Can Appreciation Day, I hope members of Congress from both sides of the aisle and across the country continue to work together to ensure the price brewers pay for aluminum reflects market fundamentals.

Jim McGreevy is president and CEO of the Beer Institute.