One Company's Disturbing Effort to Slap Tariffs on Canned Goods will Impact Millions of Americans
By Gerry Scimeca
One Ohio-based company is so eager to reap a windfall in profits it's ready to make American consumers pay more for basic necessities at a time when millions of families are still struggling.
Steelmaker Cleveland-Cliffs is urging the federal government to slap tariffs on imported tinplate steel used for the can packaging of food, personal care, and household products. The result would be higher prices at the grocery store, and more inflation for consumers.
Thankfully, the U.S. Department of Commerce released their preliminary decision on the tariffs on August 17, with initial duties much lower than what Cleveland-Cliffs requested. However, with the final decision still to come in early 2024 and the steelmaker working overtime to press its case, it is vital that Commerce not waver and stick to the ruling that protects consumers and manufacturers over Cleveland-Cliffs' personal gain.
Tariffs are taxes on imported goods. Proponents say they target foreign countries for dumping goods below the cost of production, but invariably it is consumers who are the ones hit with higher prices.
Cleveland-Cliffs is petitioning the Department of Commerce and the U.S. International Trade Commission for tariffs of up to 300% on tinplate imports from eight countries. In this case, however, the evidence is clear that the U.S. producer is seeking an unfair advantage by burdening its competitors with higher costs.
Like a contagion, tariffs on imports increase the cost of goods and services that use the imports to which the tariff applies throughout the supply chain. Because tariffs act like a sales tax, they also disproportionately harm poorer Americans who can least afford inflated costs.
In the case of tinplate steel, this would mean higher prices for everything from metal hoses, oil filters, paint trays, and baking tins to aerosols like hair spray, air fresheners, and cleaning products. But the most pain would be felt by Americans still struggling to pay their bills through the current epidemic of inflation, as the cost of canned items they rely on every day to put food on the table would see a marked price increase, up to 58 cents per canned item per Cleveland-Cliffs' demand.
Struggling households often turn to food banks as a first line of support. But these charities depend on low-cost, non-perishable canned goods to feed the people they serve, and dramatic price increases of these food items will mean fewer families will receive the help they need.
Tariffs of this magnitude on tinplate steel would also sever ties between American canned goods manufacturers and their overseas suppliers -- who provide over 40 percent of the tinplate steel used to meet U.S. canned food demand. The reduction in supply will have producers scrambling to secure the Cleveland-Cliffs tinplate they need to stay in business. The sky's the limit on how high prices will go if Washington foolishly grants Cleveland-Cliffs this market power. We could further experience supply-chain shortages as domestic supplies fail to meet demand.
Washington should reject this blatant attempt to manipulate U.S. trade regulations -- lest the finances of millions of families across America get dashed to pieces on Cleveland-Cliffs.
Gerard Scimeca currently serves as Chairman of Consumer Action for a Strong Economy.
