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Steel and Aluminum Tariffs Could Cause Broad Price Hikes
The recent announcement of sweeping 25% tariffs on all U.S. steel and aluminum imports has sparked concern among experts who predict far-reaching consequences for the economy. According to international trade expert Christine McDaniel, any product that relies on these metals will likely see significant price increases.
“This is a broad-based impact,” McDaniel emphasized. “All manufacturing that uses steel or aluminum, or something that uses steel and aluminum will be affected.” The tariffs will likely lead to higher prices for goods as diverse as cars and electronics, canned foods and beverages, gym and sports equipment, and even appliances like dishwashers and air conditioners.
Dr. Wayne Winegarden, a senior fellow at the Pacific Research Institute, concurred with McDaniel’s assessment. “This is a barn burner,” he warned, referring to the potential impact on the economy. “Higher prices will lead to an economic slowdown.”
One of the most unexpected consequences may be seen in the beverage industry. Many food and drink manufacturers rely on aluminum cans for packaging. However, if tariffs make these materials more expensive, companies like Coca-Cola could potentially shift their focus to alternative packaging solutions.
In an earnings call last month, Coca-Cola CEO James Quincey revealed that the company imports aluminum for its cans and may be forced to adapt to rising costs. While this might initially lead to a short-term advantage for competitors using plastic bottles, it is likely that consumers will bear the brunt of these costs in the long run.
In fact, even breweries like Brooklyn-based Talea are facing uncertainty about how to absorb increased costs without passing them on to customers. Co-founder LeAnn Darland expressed concerns over potential price hikes and warned that “Sometimes we get complaints that our beer is too expensive.” While she hopes to mitigate these increases by negotiating with suppliers, it remains unclear whether consumers will be willing to accept higher prices.
The impact of the tariffs will likely trickle down to other industries as well. The construction sector, for instance, will face rising costs due to the increased cost of metal hardware components like door and window frames.
As a result, homebuilders may be forced to increase prices, placing an additional burden on already struggling homeowners or renters. “Those costs are going to be passed on to the ultimate homeowner or renter,” warned CEO of the National Association of Home Builders James Berthaume.
In conclusion, it is clear that these tariffs will have far-reaching consequences for a wide range of industries and consumers alike.
Source: https://www.cbsnews.com/news/steel-aluminum-tariffs-consumer-prices-beer-automobiles/
