DeKALB – Aluminum and steel tariffs announced on Tuesday have businesses bracing for the impact the trade barrier will have.

Earlier this week, the White House announced a 25% tariff will be imposed on all steel and aluminum imports.

Colin Kuehl, assistant professor of political science at NIU teaches classes on international political economy. Kuehl said a tariff, which is a tax on imports, will generally cause the price of goods being imported to increase.

Tariffs have short and long term impacts, according to Kuehl. Long term impacts include domestic job creation. 

“That’s what the administration is hoping for is that this cost on tariffs make domestic suppliers more competitive,” he said. “I think in the long term that might happen, but in the short term it’s really hard to see a lot of these manufactured goods coming back to the United States.”

Questions often circulate about who bears the cost of tariffs, with officials sometimes claiming that other countries pay for them.

“At the end of the day, those costs are going to be passed on to the consumer,” Kuehl said. “They’re probably not going to be huge, but when aggregated, I do think they will have an effect on our pocketbook.”

Accounting for the costs and benefits of tariffs requires considering the impact for importers and exporters, Kuehl said.

“The costs can be very localized,” he said. “There’s that steelworker or whatever it might be. Their job has been exported overseas.”

Kuehl said that while lower tariffs can benefit domestic labor industries like steel and aluminum manufacturing, companies that rely on imported goods tend to experience a greater impact due to tariff increases.

“Most economic analysis would suggest that the cost to those folks is way higher than any of the tiny benefits we might get with those jobs that are in the actual area,” Kuehl said.

The tariffs on aluminum and steel are expected to impact a wide swath of businesses that use the metals.
Illinois’ burgeoning craft beer industry is one market that stands to feel an impact.

Ray Stout, executive director of Illinois Craft Brewers Guild said the tariffs could dramatically impact the state’s craft brewing industry.

Illinois has 275 operating breweries which directly support 6,000 jobs and an estimated 16,000 jobs that are supported when considering the entire supply chain, according to Stout.

“Breweries are not only employing staff, they’re employing artists, they’re employing mobile canning lines, wholesalers, keg distributors,” Stout said. “All of these things come along with the craft beer industry. It’s playing a more and more pivotal role in the greater Illinois economy every single year.”

Most of the beer packaged by Illinois breweries goes into aluminum cans.

“Breweries package about 62% to 70% of their production,” Stout said. “A decade ago we saw a lot of beers being bottled. Now 95% to 97% of what we’re seeing in manufacturing in the state of Illinois is going into cans.”

Stout said Illinois brewers are mainly sourcing aluminum and ready made cans from Canada.

“A 25% tariff on aluminum would be pretty devastating,” he said.  

Arguments made by President Donald Trump in favor of the tariffs assert they will stimulate job growth through increased demand for domestic production of the metals.

Economic analysis from the Peterson Institute for Economic Analysis, a nonpartisan research organization, points to increases in prices for U.S. consumers as a result of the tariffs.

In line with this analysis, Stout said current production capacity in the U.S. would be unable to meet the industry’s needs.

“There are companies in the United States that manufacture aluminum cans,” Stout said. “There’s not enough to keep up with the current demand.”