Sizing up expense of cans - Daily Southtown

Sizing up expense of cans

From beer to food, Trump’s aluminum, steel tariffs could be packaged into price hikes

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An employee works on the production line June 13 at the Independent Can Co. in Belcamp, Maryland. Caroline Gutman/The New York Times

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By Julie Creswell The New York Times

For years, the biggest expense for Pacific Coast Producers was the peaches, pears and tomatoes that the farmers in the co-op grew to be processed for sale in grocery stores, restaurants, hospitals and school cafeterias.

But since 2018, the biggest expense for the co-op isn’t the fruit: It’s the cans.

New tariffs are reigniting tensions over an object that is critical to the food and beverage industry but that most consumers give little thought. Cans are likely to be more expensive after President Donald Trump’s move to double tariffs on imported steel, the main material used in cans for food, and on aluminum, commonly used for beverages.

About 80% of the specialized tin-plated steel — steel with a thin layer of tin — used for cans for food comes from abroad. And while roughly 70% of the aluminum used in cans for beer, energy drinks and sodas comes from recycled material, the other 30% that is new aluminum is largely imported.

Pacific Coast Producers won’t feel that bite — yet. Like other manufacturers, it locked in critical elements of its supply chain well in advance. But if those tariffs remain in place, the co-op’s next order of tin-coated cans could cost it an additional $40 million.

“We can’t absorb those costs,” CEO Matt Strong said.

The co-op, based in Lodi, California, sells its fruit under a variety of private-label brands and has annual revenue of $1.1 billion. Strong estimates that he is likely to raise prices for retailers, like grocery stores, as much as 10 cents a can to cover the increased expense. Retailers, he said, could pass the cost on to consumers.

Steel manufacturers and the Trump administration argue that higher tariffs are necessary to protect the industries from “unfair foreign competition” and to spur investment in new and existing mills. But food and beverage companies and the manufacturers of cans say new tariffs will raise prices and make it more difficult for them to compete against foreign suppliers.

Previous tariffs didn’t encourage steel and aluminum manufacturers to expand U.S. production of the metal used to make cans. Instead, they reduced it.

In 2018, Trump put tariffs of 25% on steel and 10% on aluminum, with some exclusions. In the following years, steel producers shut down nine production lines making the specialized tin-plated steel across the country, leaving only three, according to the Can Manufacturers Institute.

On June 18, Nippon Steel completed its acquisition of U.S. Steel more than a year after the Japanese steelmaker first tried to buy its U.S. competitor. Under the agreement, the government will retain the right to appoint one independent director on U.S. Steel’s board. A majority of board members will be U.S. citizens.

U.S. Steel produces tin plate, but it has scaled back its operations in recent years. Cleveland-Cliffs shut down a tin-plate plant in Weirton, West Virginia, in 2024, citing a decision by the International Trade Commission rejecting U.S. tariffs on foreign countries that exported tin-plated steel and other metals to the United States.

In the past two decades, the number of aluminum smelters in the United States has dropped to four from 24, according to the Aluminum Association.