This Thanksgiving, many Americans will prepare dinners with family and friends. But they could be faced with much higher cost at the grocery checkout — thanks to tariffs.
Since President Trump rolled out sweeping tariffs on steel and aluminum earlier this year, food and can manufacturers have warned that prices will rise. The Can Manufacturers Institute explained that tinplate steel constitutes roughly 60 percent of a can’s cost. A tariff as low as 5 percent will trigger roughly $1 billion in new annual costs to scores of food products sold in cans, including Thanksgiving favorites like cranberries, green peas and pumpkin pie filling.
{mosads}From the food on the shelves to the steel shelving itself, grocers are experiencing the negative impacts of tariffs both in and out of their stores. As an industry with thin profit margins, rising costs for raw materials and increased transportation expenses, a change of just a few pennies per item all add up. Any increase in expenses because of a tariff could have unintended consequences for these local entrepreneurs and the communities they serve.
Americans usually buy more Thanksgiving staples this time of year, but tariffs could change that and impose higher costs on some of our most vulnerable neighbors.
Tariffs Hurt the Heartland, a nonpartisan coalition representing thousands of workers, farmers and businesses across the country, recently released data showing that aluminum-import tariffs have already cost American companies around $125 million. Imported aluminum products also have faced $133 million in tariffs this year, compared to just $9 million in September 2017. Further, if the cost of all 24 billion cans that Americans use each year increases by 3 cents, we’ll see an additional $720 million in canning costs.
Tariffs are taxes that hurt sales and inject unpredictability into the markets. The trade war exacerbates existing financial difficulties, as the increased cost of raw materials creates further pressure on prices. When the first wave of tariffs on foreign goods was announced earlier this year, most Americans might have shrugged off the news. For many people, tariffs seemed like a distant concept only affecting a few items or industries.
{mossecondads}But now these tariffs are having more of a direct impact. Imported products subject to the current tariff mandate faced $1.8 billion in tariffs in September, compared to just $393 million last year. Many analysts are anticipating even more tariffs in the coming months, and the most recent wave of tariffs is set to increase from 10 percent to 25 percent at the beginning of next year. Grocery manufacturers and Thanksgiving shoppers will be some of the first to feel the sting of higher prices unless the Administration shifts course soon.
Like most Americans, retailers and other stakeholders in the food supply chain want our foreign trade partners to play by the rules, and we support the president’s desire to establish fair and equitable standards. Unfortunately, the current approach has led American businesses and workers down a road of higher costs.
Americans have a lot to be thankful for this Thanksgiving, but not tariffs. To achieve our shared goal of stomping out unfair trade, we must open access to markets and prevent unnecessary price hikes that burden American businesses and consumers alike.
Chris Jones is the vice president of government relations and counsel of the National Grocers Association, which represents the retail and wholesale grocers that comprise the independent sector of the food distribution industry.