ATLANTA — Despite warnings by allies, President Trump signed off on a hefty increase of tariffs on steel and aluminum.
Experts and members of Trump's own party warned that the hike – 25% on steel and 10% on aluminum – would spark a trade war and increase prices for consumers worldwide. The President argued they are designed to protect American industries.
In a statement from the White House, Trump said his plan allows exemptions for Canada and Mexico, pending the outcome of ongoing trade negotiations, and allows other countries to apply for relief from the new duties.
But not everyone views them in the same light as the President. In a statement against the tariffs, Georgia Sen. Johnny Isakson voiced his concerns that the taxes would lead to trade wars and "inevitably create more trouble."
“This new tax on American consumers will have lasting consequences and will impede the pro-growth agenda we have pursued," the senator said. "While there are some exemptions from the tariffs, the administration must go further to exempt additional key U.S. allies as well as inputs relied on by Georgia manufacturers."
Now that the tariffs are in place, however, 11Alive wanted to know what it would mean for local business here in the state. Joe Henke spoke to Atlanta brewery Monday Night Brewing.
The local company said 5 million aluminum cans slide down their assemble line every year, part of the packaging process. Co-founder Joel Iverson said it's a large part of his budget.
"It is a pretty big chunk," he said. "We have shifted from bottles into cans partially because it was more affordable and more recyclable."
The good news for him is that Monday Night Brewing's aluminum cans are produced in the U.S. and Mexico and excluded from the new increased tariffs. But for other companies sourcing aluminum from other countries, the tax could add up.
Iverson said one aluminum can, for example, can cost him 10 cents. A 10 percent tariff means a can goes up 1 cent, or a 6 pack goes up 6 cents. While it sounds like pocket change, the tariff could also lead to other markups.
Before Monday Night Brewing's beer ends up in aluminum cans, it begins inside steel tanks. "We have all these stainless steel tanks," Iverson said. "We are about to order a bunch more, and the tax on the steel could affect those as well."
All of a sudden, your six pack could cost a bit more.
"Sometimes a few cents here and there might add up in a way that a retailer says, 'We want this to be at $10.99 instead of $9.99'," Iverson explained.
Trump is not the first person to put a tariff on steel imports; then-President George W. Bush did it in 2002. However, Emory University economist Ray Hill said the Bush tariffs didn't create jobs, profits for shareholders went up and push back from other industries led to the tariffs being repealed within a year. Hill theorizes that may happen again this time around.
"When Trump sees the reaction of the rest of the world, he decides this is a bad idea, he's fulfilled his campaign pledge, and then the tariffs are left to quietly be removed," Hill said.
Meanwhile at Monday Night Brewing, Iverson said they will keep making beer, but are now waiting to see how the tariffs play out.
"A lot of uncertainty which is not good as a business owner," he concluded.
The new tariffs go into effect in 15 days.