Food industry group warns Biden’s steel tariffs could drive up canned goods prices

A set of proposed tariffs on tin mill steel currently being weighed by the Biden administration is causing concern among a coalition of CPG industry groups and food companies.

David Chavern, president of food industry trade group the Consumer Brands Association (CBA), said in a statement this week that while the organization supports President Biden’s newly updated supply chain agenda, tariffs on the steel used to make food cans currently being weighed by the Department of Commerce could result in a loss of up to 40,000 manufacturing jobs, drive up grocery prices, and fuel more imports from China.

“As the administration continues to pursue policies that strengthen supply chains and domestic manufacturers, it should also ensure that certain decisions do not unintentionally compromise U.S. manufacturing jobs or negatively impact supply chain fluidity,” Chavern said.

In August, the Department of Commerce proposed implementing tariffs on tin mill steel imports from Canada (5.3%), China (122.5%), and Germany (7%), alleging unfair trading that harms domestic steelmakers. The proposal came after steel company Cleveland Cliffs filed a series of petitions calling for more action against companies importing steel to the U.S.

“There has been a significant surge in unfairly priced tinplate imports flooding the United States over the past two years, and we cannot let this persist,” Lourenco Goncalves, the CEO of Cleveland Cliffs, said in a statement earlier this year.

Tin-mill steel is a specialty steel that is used primarily for canned CPG products, and the U.S. can currently only handle producing half of the steel needed, and much of it is imported from other countries.

On Monday, the White House unveiled a new agenda in an effort to secure the supply chain with a variety of new investments, including the Department of Commerce’s implementation of a new data-sharing system.

Tom Madrecki, vice president of supply chain and logistics at the CBA, told Food Dive in an interview that while the administration is succeeding with several of its trade ambitions, imposing tariffs of up to 300% will have negative impacts on manufacturing employment in the largest supply chain sector, food and beverages. The price of canned goods has the potential to increase by 30% per can under the tariffs — up to 58 cents more expensive — according to two internal CBA studies.

“Products would then in turn become more expensive, and you’re actually undercutting U.S. production of those products,” Madrecki said. “For America’s most vulnerable that rely more on canned food, that can actually mean something quite significant.”

Madrecki said Cleveland Cliffs is more concerned with raising its costs and finding a way to justify it.

“It’s not to reinvest in their business or compete fairly in the marketplace, it’s something that the industry sees as an opportunistic play by the petitioner,” Madrecki said.