Tuesday, March 20, 2018

Regarding those tariffs

American Keg Company is the only remaining U.S. manufacturer of stainless steel beer kegs. Despite competition from German and Chinese firms, American Keg has only used domestic steel. But now it’s being punished for this domestic sourcing as Donald Trump’s steel tariffs have forced the business to lay off a third of its workforce.

Since it began manufacturing kegs in 2015, the Pottstown, Pennsylvania-based American Keg has operated on a narrow margin. The 15.5-gallon keg is a staple in bars and fraternities, and the American-made version currently retails for $115 while a German or Chinese keg costs about $95. American Keg has survived by selling to craft breweries that want to support U.S. workers and American steel, even at a small premium. “But there’s a limit to what people would pay to have an American product,” says CEO Paul Czachor.

Mr. Trump has imposed the tariffs in the name of national security. But in practice they punish American steel users by giving the American metal industry the opportunity to raise prices while still undercutting foreign steel and aluminum.

Read more
https://www.wsj.com/articles/the-trump-tariff-layoffs-begin-1521241456

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