The Impact of President Trump's Steel and Aluminum Tariffs on U.S. Food and Beverage Manufacturers

Introduction

President Donald Trump’s decision to double tariffs on imported steel and aluminum to 50% has sparked significant debate regarding its economic implications. While the administration argues that such measures protect domestic industries and encourage investment, the reality for U.S. manufacturers, particularly in the food and beverage sector, paints a more complex and concerning picture. This report examines the cascading effects of these tariffs on the cost of food and beverage cans, the challenges faced by manufacturers, and the broader economic consequences for consumers and businesses.

The report draws on multiple sources to provide a comprehensive analysis of the situation, highlighting the reliance on foreign imports, the decline in domestic production, and the potential for increased consumer prices.

The Role of Steel and Aluminum in Food and Beverage Packaging

Steel and aluminum are critical materials for the food and beverage industry, particularly for the production of cans. Tin-plated steel is used for food cans, while aluminum is essential for beverage cans. The U.S. food and beverage industry produces approximately 135 billion metal cans annually, including 115 billion aluminum beverage cans and 20 billion steel food cans (NPR, 2025).

However, the U.S. heavily relies on imports to meet its demand for these materials. Approximately 70% of tin-plated steel and 30% of virgin aluminum used in can production are sourced from foreign suppliers (TIME, 2025). This reliance on imports makes the industry particularly vulnerable to tariff-induced cost increases.

The Economic Impact of Tariffs on Steel and Aluminum

Rising Costs for Manufacturers

The doubling of tariffs on steel and aluminum has already caused significant price increases for manufacturers. Since 2020, steel can prices have surged by 67%, while aluminum can prices have risen by 26% (Packaging Dive, 2025). For companies like Pacific Coast Producers, a fruit and vegetable co-op, cans have become their largest expense, surpassing the cost of produce. The co-op anticipates an additional $40 million in costs for its next order of tin-coated cans, a burden that CEO Matt Strong says they "can’t absorb," likely leading to price hikes of up to 10 cents per can (Marketplace, 2025).

Similarly, craft brewers, who have increasingly adopted aluminum cans as a packaging method, are facing additional stress. Aluminum cans now account for approximately 75% of packaged craft beer’s volume and revenue, but the rising costs are prompting some brewers to consider alternatives like returning to bottles (Beverage Daily, 2025).

Declining Domestic Production

Despite the administration's claims that tariffs protect domestic industries, the U.S. has seen a decline in domestic production capacity for both steel and aluminum. Since 2018, nine U.S. production lines for tin-plated steel have closed, leaving only three operational. Similarly, the number of U.S. aluminum smelters has dropped from 24 to just four over the past two decades (Imbibe, 2025).

This decline in domestic production capacity exacerbates the challenges posed by tariffs, as U.S. manufacturers are forced to rely on increasingly expensive imports to meet their needs. The Aluminum Association has argued that energy policy, not just tariffs, is key to reviving primary aluminum production in the U.S. (TIME, 2025).

Consequences for Consumers and Businesses

Higher Consumer Prices

The increased cost of steel and aluminum is being passed on to consumers in the form of higher prices for canned goods and beverages. Food economists warn that the tariffs will create an inflationary impact on the consumer, who relies heavily on canned foods for affordable meals (NPR, 2025). For example, Pacific Coast Producers expects to raise prices by up to 10 cents per can, a cost that will ultimately be borne by consumers (Marketplace, 2025).

Competitive Disadvantage for U.S. Manufacturers

The tariffs risk making U.S. food and beverage manufacturers less competitive against foreign suppliers. With domestic production capacity insufficient to meet demand, U.S. manufacturers face higher input costs compared to their international counterparts. This puts them at a disadvantage in both domestic and global markets (Packaging Dive, 2025).

Additionally, some manufacturers are exploring alternative packaging options, such as plastic, to mitigate the impact of rising costs. However, this shift could have environmental consequences and may not fully offset the financial burden (Beverage Daily, 2025).

Broader Economic Implications

Inflation and Supply Chain Disruptions

The tariffs are contributing to inflation across the food and beverage sector. Consumer packaged goods (CPG) brands are passing on increased costs to consumers, resulting in mid-single-digit food inflation in 2025 (Imbibe, 2025). This inflation is further exacerbated by supply chain disruptions, as manufacturers reassess global sourcing to avoid tariffs. Longer lead times and increased complexity in supply chains are creating additional challenges for the industry (Food Science, 2025).

Limited Effectiveness of Tariffs

While the administration argues that tariffs protect domestic industries, the evidence suggests otherwise. A 2023 report by the U.S. International Trade Commission found that tariffs reduced imports but had only minor effects on prices and did not significantly boost domestic production (White House, 2025).

Conclusion and Recommendations

President Trump’s decision to double tariffs on imported steel and aluminum has created significant challenges for the U.S. food and beverage industry. The reliance on foreign imports, combined with declining domestic production capacity, has led to rising costs for manufacturers and higher prices for consumers. While the administration claims that tariffs protect domestic industries, the evidence suggests that they have not achieved their intended goals and may instead be harming U.S. competitiveness.

To address these challenges, policymakers should consider a more balanced approach that includes:

1. Investing in Domestic Production: Strengthening domestic steel and aluminum production through incentives and energy policy reforms.2. Promoting Recycling: Expanding recycling infrastructure to reduce reliance on imported materials.3. Mitigating Consumer Impact: Implementing measures to offset the impact of tariffs on consumers, such as targeted subsidies for essential goods.

By adopting these strategies, the U.S. can better navigate the challenges posed by tariffs and ensure the long-term competitiveness of its food and beverage industry.

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References

1. NPR. (2025, February 20). How Trump’s steel and aluminum tariffs could affect grocery prices. NPR. https://www.npr.org/2025/02/20/nx-s1-5300051/tariffs-steel-aluminum-cans-food-groceries

2.. TIME. (2025, February 13). How the Steel and Aluminum Tariff Hike Will Hit Consumers. TIME. https://time.com/7291234/trump-tariffs-steel-aluminum-prices-businesses/

3. Marketplace. (2025, June 3). Trump’s steel and aluminum tariffs could drive up grocery costs. Marketplace. https://www.marketplace.org/story/2025/06/03/trumps-steel-and-aluminum-tariffs-could-drive-up-grocery-costs

4. Packaging Dive. (2025, March 13). Metal tariffs make American manufacturing less competitive, can makers say. Packaging Dive. https://www.packagingdive.com/news/aluminum-steel-tariffs-exemptions-american-production-canned-foods/742392/

5. Imbibe. (2025, May 1). How Tariffs Are Reshaping Your Food & Beverage Production in 2025. Imbibe. https://imbibeinc.com/technical-industry-guidance/how-tariffs-reshaping-food-beverage-production-in-2025

6. Food Science. (2025, April 1). What are the current and likely near future effects of tariffs on the food and beverage industry? Food Science. https://foodscience.com/2025/04/01/what-are-the-current-and-likely-near-future-effects-of-tariffs-on-the-food-and-beverage-industry/

7. Beverage Daily. (2025, February 13). Will Trump’s tariffs on aluminum hit growth in beverage cans? Beverage Daily. https://www.beveragedaily.com/Article/2025/02/13/will-trumps-tariffs-on-aluminum-hit-growth-in-beverage-cans/

8. White House. (2025, June). Fact Sheet: President Donald J. Trump Increases Section 232 Tariffs on Steel and Aluminum. White House. https://www.whitehouse.gov/fact-sheets/2025/06/fact-sheet-president-donald-j-trump-increases-section-232-tariffs-on-steel-and-aluminum/