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Can Manufacturers Institute Asks Trump Administration to Exclude Tinplate Steel from Tariffs or Other Import Restrictions

 

WASHINGTON, DC – May 25, 2017 – Can Manufacturers Institute (CMI) executive told the U.S. Commerce Department yesterday that tinplate steel, the material used to make food cans, should be exempt from tariff and other import restrictions because of the vital 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 and examination 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 among competitive packages.

This proposed tariff or restriction would disadvantage the food can manufacturer 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 and their families in these U.S.-based plants.  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, including 13 million children. 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.”

Can Manufacturers Institute (CMI) is the national trade association of the metal can manufacturing industry and its suppliers in the United States. The can industry accounts for the annual domestic production of approximately 124 billion food, beverage and other metal cans; which employs more than 28,000 people with plants in 33 states, Puerto Rico and American Samoa; and generates about $17.8 billion in direct economic activity. CMI members are committed to providing safe, nutritious and refreshing canned food and beverages to consumers.


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