Since we are all preppers now, retail consumer foodies and the prepping-minded should consider stocking up on their favorite nonperishable food before an imminent price spike in canned foods and miscellaneous items that utilize tin mill steel. “The resistance of tin to corroding makes it a popular choice to coat other metals such as steel. Tin cans, for example, are made of aluminum or steel and coated with tin.”
Last week, the Biden administration implemented new import tariffs on can-making tinplated steel imported from Canada, China, and Germany. Five countries are currently spared from the import duties: Britain, the Netherlands, South Korea, Taiwan, and Turkey. The five countries that managed to escape duties account for roughly 50% of U.S. tin mill steel imports while China is about 14% and Canada and Germany are 30%.
The move falls under anti-dumping duties after a Commerce Department investigation found that foreign steelmakers were selling their tinplate products in the U.S. at unfairly low prices. The study was launched following a petition from the United Steelworkers union and Cleveland-Cliffs, a U.S. tinplate plant owner that has seen several U.S. production facilities shut down in recent years. The main complaint is that cheap steel imports that include the tinplate sector harm domestic steelmakers and jobs.
“‘The sad reality is that when some of our trading partners saw significant cost increases in their home markets because of global events, they chose to dump here rather than reduce production,’ said the statement from USW International President Tom Conway.” – Cleveland.com, Aug. 17, 2023
The Commerce Department said the highest preliminary anti-dumping duties of 122.5% are being imposed on tin mill steel imported from China, which includes its largest producer, Baoshan Iron & Steel. China’s rates are the highest due to the lack of cooperation leading to an “adverse inference” determination, while other Chinese producers could not prove they were independent of China’s government. Preliminary duties on German imports will be 7.02% (which includes ThyssenKrupp), with 5.29% on Canadian producers (including ArcelorMittal). The new tariffs follow the Trump administration’s 2018 announcement of a 25% tariff on imported steel that sent shockwaves through the markets.
WTO rejects China’s Trump-era tariffs complaint – WION, Aug. 17
Food companies fear the additional tariffs will increase canned food prices by up to 30%. The Biden administration assumes that a narrow focus with fewer countries will lessen the inflation impact on U.S. consumers. There is no way that tariffs primarily on cans for food packaging will not add more misery for folks whose budgets were pummeled by higher prices at the grocery store, gas station, home energy needs, and a plethora of consumer products and services impacted by the supply chain crisis and Capitol Hill’s fiscal policy during the pandemic panic.
Tariffs On Steel For Tin Cans Will Likely Hit Consumers… “‘Foreign dumping of tin products into the U.S. market has already forced significant layoffs at U.S. facilities; failure to curtail it will ultimately choke out domestic production, leaving can manufacturers beholden to foreign producers and their prices,’ said USW international vice president Dave McCall. ‘Duties on tin mill products are essential to stabilizing our market, restoring fair prices, and protecting good union jobs’… ‘All tariffs are ultimately about making the rest of the country pay for favors dispensed by the Federal government to a narrower sectoral interest,’ said Samuel Gregg, distinguished fellow in political economy and senior research faculty at the American Institute for Economic Research…This particular case fits that bill exactly.’” – Forbes, Aug. 16
The Can Manufacturers Institute (CMI) argued not to impose tariffs on tinplate steel because U.S. steelmakers now produce less than half of the tinplate needed for domestic can manufacturing and it would lead to higher material costs and food prices. A bipartisan letter from members of Congress in June also argued that anti-dumping duties would raise costs for canned food and aerosol products, which would encourage Chinese producers of canned goods to increase their exports of cheaper canned food. CMI responded to the congressional letter and issued a statement following the Biden administration’s decision to impose tariffs:
“Cleveland Cliffs failure to adequately invest in improving its tin mill facility in Weirton, West Virginia, has precluded the company from participating in the larger, growing ‘drawn and iron’ steel can making sector. Despite Cleveland Cliffs’ limited market participation, the company has the audacity to petition for antidumping duties on the full range of tin mill products including for those it and other domestic tin mill producers are unable to produce in sufficient quantities to serve U.S. can makers. Currently, the U.S. steel industry produces less than 50% of the tinplate needed for domestic can manufacturing. Therefore, it is imperative that additional tariffs not be imposed on steel imported from our allies to make metal cans that Americans rely on for nutritious foods and other everyday uses. This congressional letter makes clear that the Biden administration should discourage the Department of Commerce and the ITC from imposing antidumping duties on tin mill steel will lead to higher food prices for the consumer and job losses for American workers.”
“CMI applauds the Commerce Department’s decision to not impose duties on tin mill products imported from the Netherlands, the United Kingdom, Turkey, Taiwan, and South Korea. We are hopeful the final Commerce determination will eliminate the proposed duties on Canadian and German tin mill steel. U.S. tin plate prices already remain the highest in the world due to the 232 tariffs, placing domestic can makers at a competitive disadvantage to foreign imports of unfilled steel cans and foreign filled food products. We are thankful that the Commerce Department recognized that the additional duties requested by Cleveland Cliffs would have exacerbated our industry’s competitive disadvantage even more.”
Chinese officials claim that new tariffs on tin mill steel products unfairly target China and are likely a violation of WTO rules.
“The latest unilateral and protectionist move from the US government came even as US authorities selectively cited a recent WTO report on Chinese counter tariffs against the US’ so-called Section 232 tariffs on steel and aluminum in criticizing China, laying bare the US’ hypocrisy and double standards when it comes to international trade rules, analysts noted, adding that such moves will further disrupt global supply chains while damaging the US’ own interests… It is worth noting that the US imports about 14% from China, while Canada and Germany together account for about 30%, according to data from the US Commerce Department. Despite the relatively small amount of imports from China, it bears the heaviest anti-dumping punishment, a tax rate as high as 122.5%, ten times the combined rate of the other two countries… The steel and aluminum tariffs imposed by the US, as well as the heavy tariffs on tin-plated steel specifically targeting China, are a violation of global trade rules and undermine the principles of the WTO… The more frequently and intensively super tariffs are utilized, the greater the imbalance they will create in the global trade system, leading to more severe fluctuations and bottlenecks in the industrial chain.”
It is also important to note that the CMI issued a report to the Commerce Department in April 2021 citing that steel can manufacturers were in crisis due to the 25% Section 232 tariffs, individual country tariffs, and quotas. On page 7 of 10, the CMI report noted:
“The cost breakdown of a 15oz of U.S. grown corn…
- Metal Can: 34%
- Corn: 24%
- Labor: 15%
- Warehousing/Labeling: 12%
- Overhead: 8%
- Shrink Wrap/Corrugate: 4%
- Ingredients: 3%
The conclusion was that “imports of foreign produced canned corn have lower metal costs and, in some instances, a lower labor cost.”
The bottom line is that the price of a can of soup and other canned food items at your local grocery store are about to go up. The Wall Street Journal cited the Consumer Brands Association (CBA), a trade group that represents companies such as Campbell Soup and Fresh Del Monte Produce. The CBA estimated that the new tariffs “could raise the prices of canned food by up to 30%” in the near future. Be sure to get your pantry stocked and remember to rotate your canned foods in storage according to the “use by” date. Freeze-dried foods are the best option and have a shelf life of up to 30 years. While you’re assessing your situational needs, don’t forget to read “A Shortage of White Rice is Imminent” published in late July. If you live in an apartment or home that’s not off the grid or in a rural setting with private land, the following video offers some helpful guidelines for a well-stocked food pantry.
A Preppers Pantry – Oct. 2020
Plan Your Trade, Trade Your Plan