CLFP Opposes Steel Tariffs; China Announces Tariffs on U.S. Products

President Trump signed proclamations on March 8 imposing tariffs on steel and aluminum imports, stating that the tariffs were designed to protect American industries. The tariffs include tinplate steel, which is the principle intermediate good used by food processors and canners. The proposed 25 percent steel tariff and 10 percent aluminum tariff will raise the cost of tin plate steel used in food cans and some types of aluminum foil used in food packaging.

CLFP took a delegation back to Washington D.C. the week of March 5 to lobby Congress and the Administration about the adverse impacts these tariffs will have on the food processing industry in California and across the country.

The delegation argued that in 2016 U.S. demand for tinplate steel was 2.1 million tons, while domestic tinplate production was only 1.2 million tons. This means only 58% of domestic demand can be met by U.S. tinplate producers, making it necessary for U.S. can manufacturers to turn to foreign tinplate steel suppliers. Tariffs will not materially increase the domestic supply of tinplate steel.

Further, there has also been a noticeable decline in the quality of domestic tinplate. The rejection rate of domestically produced tinplate is approximately 300% to 500% higher than the tinplate produced by foreign suppliers. Additionally, only 50% of domestic tinplate deliveries are on time.

After the President's proclamation, CLFP joined with the Can Manufacturers Institute to support their efforts to apply for an exclusion for tinplate steel from the tariff.

In response to the tariffs, China has announced that it will retaliate by imposing tariffs on 130 products imported from the U.S. and has also requested that the World Trade Organization conduct a review of how the U.S. is using its national security tariff policies in this case. More than one-half of the commodities on China’s retaliatory tariff list are agricultural products, including raisins, dried figs, pistachios, walnuts, almonds, frozen strawberries and other frozen fruit. In addition, China is the ninth largest market for U.S. horticultural products, importing $2 billion in 2017. There are major concerns about how a trade war could have a significant impact on food producers across the U.S.