Can Manufacturers Institute (CMI) executives told the U.S. Commerce Department that tinplate steel, the material used to make food cans, should be exempt from tariff and other restrictions because of the role it plays in the U.S. economy.
CMI president Robert Budway provided this perspective at the U.S. Department of Commerce Bureau of Industry and Security public hearing, where secretary of Commerce Wilbur Ross presided over the hearing investigating the effects of steel imports on U.S. National Security.
Tariff or trade restrictions will have severe economic impact on the can manufacturing industry and its employees. The dominant issue is that U.S. tinplate steel production does not meet domestic demand. In 2016, U.S. demand was 2.1 million tons, while domestic tinplate production was 1.2 million tons, which means that only 58 percent of domestic demand can be met by U.S. tinplate producers.
Tinplate steel is a unique type of steel that is specifically made for food cans. Approximately 2 percent of all steel is tinplate. In citing the U.S. Department of Commerce and the U.S. International Trade Commission, acknowledging this fact, Budway stated that a separate category of tinplate steel requires its own consideration as it is not used in any U.S. defense or national security applications.
There has been a noticeable decline in the quality of domestic tinplate. In Budway’s statement, he said, “The rejection rates of domestically produced tinplate are approximately 300 percent to 500 percent higher versus foreign suppliers.”
At the hearing, Budway noted that the steel cans manufacturing industry provides U.S. jobs that produce quality containers for nutritious, affordable, accessible food. A tariff on tinplate steel would provide economic harm because the U.S. material would be insufficient and it would put food cans at a disadvantage versus competing packaging materials, such as plastic and glass, which are not subject to tariffs. Budway said, “Even a small increase in the price of raw materials would create a destructive competitive disadvantage, forcing possible closures of can manufacturing plants in the United States and negatively impacting the 10,000 workers. One could easily foresee where finished cans or even cans with food products made overseas could be imported at lower costs than U.S. produced cans.”
Finally, the vast majority of steel cans are used for canned food, which offers an affordable solution in feeding the nation. Budway reminded the committee that access to affordable nutrition is vital for the 42 million Americans that live in food insecure households. Additionally, those on government food assistance, including the USDA Supplemental Nutrition Assistance Program (formerly known as food stamps), consume canned fruits and vegetables at an even higher rate than the average American, at a cost 20 percent less than fresh food. “Tariffs or any trade barriers would have harsh consequences for those less fortunate,” said Budway, “and diminish the value of taxpayer-funded federal food assistance programs.”
In conclusion, Budway said, “For all of these reasons, we ask that the Commerce Department keep American can manufacturing competitive and exclude tinplate products from this investigation or any future tariffs or actions against this important product.”
Published in the July 2017 Edition of American Recycler News