Metal packaging producers raise red flags over new tariffs

Metal packaging manufacturers today are assessing the impact of tariffs on steel and aluminum imports that President Donald Trump announced Monday evening. They’re raising red flags about inadequate U.S. metal production capacity and anticipated higher costs for both the packaging industry and consumers.

Trump signed executive orders restoring the 25% steel tariff rate he implemented in 2018 under Section 232, and upping the previously enacted 10% rate on aluminum to 25%. The White House says the U.S. steel and aluminum industries have been “harmed by unfair trade practices and global excess capacity.”

The new tariffs do not provide exemptions, and they eliminate exemptions that had been in place for some previous tariffs, including those that former President Joe Biden imposed on steel and aluminum last year. The new tariff levels will go into effect and current exemptions will expire March 12, according to the White House.

The United States imports about a quarter of its steel, according to U.S. Census Bureau data cited by Reuters. Most of it comes from Canada, followed by Brazil and Mexico. For aluminum, about half of what is used in the U.S. is imported, the overwhelming majority coming from Canada.

Impacts to the packaging industry

U.S.-based steelmakers generally favor the new tariffs, indicating they have struggled to compete in a market with cheaper imports. But the tariffs aren’t universally applauded: Many industries that manufacture products from steel and aluminum, such as food and beverage cans, have flagged that tariffs bump up their costs.

“The new tariffs are going to increase the cost of tin plate steel used to make food cans,” said Can Manufacturers Institute President Robert Budway in an interview Tuesday. “Those costs get passed on to the food producers, who pass it on to the retailers, who pass it on to the consumer. So consumer prices will go up, and the tariffs are inflationary for us.”

Prior to the new tariffs, Amcor executives broadly said on their Feb. 4 earnings call that if tariffs impacted their costs, the company could pass down the burden to customers. Other executives, including at Ball and Crown, expressed concern last week about the impact of these costs ultimately trickling down to stressed consumers.

Following the emergence of Trump’s initial tariffs last week on goods from Canada, Mexico and China, and retaliatory tariffs from those countries, CMI joined others in calling on Trump to provide targeted relief. The group said that overly broad measures negatively affect U.S. canned food industry participants, as well as American consumers, and put the nation’s food safety at risk.

“Tariffs and other broad trade tools can make America great again, but there are unintended consequences for our nation’s food security when a tariff is placed on tinplate steel,” CMI’s Budway said in a Feb. 5 statement.

“Domestic production of tin mill steel used to make cans for fruits, vegetables, and other essential foods Americans consume daily declined dramatically over the last seven years. 70% of the tin mill steel needed to make canned products is imported today. President Trump should support American farmers, food producers, and consumers by removing all tariffs on tin mill steel,” Budway added.

Charles Johnson, president and CEO at the Aluminum Association, said in a statement Tuesday that…