You probably don’t think much about cans, even if you buy one. It’s the product in the can—soup, beans, maybe hairspray or sunscreen—that matters.
But the humble can is both a critical part of modern global supply chains and a product of it: About half of the metal used in the US to make cans is imported from abroad. And that’s why cans — more specifically, tinplate, the kind of metal used to make those cans — is at the center of a behind-the-scenes battle over tariffs, which illustrate so many of the problems of protectionist policies.
On one side of that battle is Cleveland-Cliffs, one of only two companies in the US that produces tinplate steel. In a recent petition to the Department of Commerce, Cleveland-Cliffs called for tariffs of up to 300 percent on imported can steel — the products that make up more than half of the U.S. economy’s can supply.
These rates will translate into reduced supply and higher prices, said Tom Madrecki, vice president of supply chain and logistics for the Consumer Brands Association.
“When the tariffs go into effect, they increase the cost of steel and the cost of packaging,” says Madrecki. The can itself is often the most expensive part of a canned food item, so those prices quickly add up to the overall price tag. “You [will] see food prices rise 19 to 30 percent. That works out to 36 to 58 cents per can,” he says.
And while new tariffs could protect some can manufacturing jobs in Cleveland-Cliffs, research suggests the higher prices will cause much bigger losses in the rest of the economy. The Trade Partnership, a think tank, estimates that the proposed tariffs could cause up to 40,000 job losses in downstream industries, including jobs in the blue-collar sector such as can manufacturing and food production. If the steel in their cans suddenly becomes more expensive, food manufacturing companies could simply buy finished cans (and lower rates) abroad.
“You go to the grocery store one day… and you look at the receipt in disbelief and say, ‘How did this happen?’” says Gerard Scimeca, vice president of Consumer Action for a Strong Economy. , a free market group opposed to the tariff proposal. “Well, here’s how it happened: You had a company that tried to take advantage of our trade policy for personal gain.”
And here comes the real problem: As a rule, the Department of Commerce doesn’t even consider the potential (and often obvious) consequences of these decisions. The process to request tariffs is one-sided and heavily targeted at companies pursuing protectionism at the expense of consumers and workers across the economy.
It’s no surprise that government policy is one of the main reasons why we can’t have nice things.
Further reading for this week’s episode:
“The Biden Administration Considers New Tariffs That Will Raise Canned Goods Prices,” by Eric Boehm, Rode.
“US Plans New Tariffs on Food Can Metal From China, Germany, and Canada,” by Yuka Hayashi, The Wall Street Journal
“Tinplate Steel Tariffs Will Hurt U.S. Consumers and Manufacturing Jobs,” by the Consumer Brands Association
“Four Areas Where Congress Can Oversight Trade Policy,” by Tori Smith, American Action Forum
Written by Eric Boehm; produced and edited by Hunt Beaty; mixing by Ian Keyser; fact checking by Katherine Sypher.