As the new US administration considers tariff changes, craft beverage is preparing for impact on Aluminum cans. Here’s what you should know and how to stay ahead.
THE ALUMINUM LANDSCAPE
Did you know China is the largest producer of the world’s Aluminum materials? Proposed tariffs under the new administration could introduce 10-20% universal import taxes. More notably, they’re proposing a targeted 60% tariff on Chinese goods. In response, China just announced their decision to eliminate 13% VAT refund on exports of Aluminum semi-manufactured products effective December 1st. This could have far-reaching effects on industries that rely on Chinese metal—Aluminum beverage cans included. So, what can you do to stay ahead?
UNDERSTAND YOUR SUPPLY CHAIN
For Aluminum can manufacturers that are less reliant on Chinese metal, this could mean resilience. But for those reliant on imported Chinese metal, price volatility and supply disruptions could ripple through the craft beverage market.
Ask your supplier where their Aluminum manufacturer's materials come from. Understanding their sourcing strategy can help you anticipate potential price fluctuations and make more informed decisions for your business.
HOW THIS MAY IMPACT BALL CAN SUPPLY
Ball is not anticipating passing along any Chinese tariffs to their customers in 2025, with domestic supply already strongly accounted for. This positively positions their customer base versus other manufacturers that might be more reliant on Chinese metals, buffering against potential market fluctuations.
STRATEGICALLY PLAN YOUR SUPPLY
Tariffs may lead to increased Aluminum can prices, impacting your product costs. Be proactive by budgeting for potential inflationary pressures and examining your can supply strategy. Evaluate your supplier relationships, sourcing options, and alternative solutions to gauge potential risks and build resilience into your supply chain.
FOCUS ON TRANSPARENCY
For the craft beverage industry, this might mean higher prices for Aluminum cans, which in turn, could push up your price for customers. Openly communicate with customers about potential price adjustments, maintaining loyalty during uncertain times.
Cask’s commitment to our customers is to provide transparent cost pass-throughs and an understanding of market fluctuations to help shield from sudden cost spikes. If it's timely to explore a strategic can supply program for 2025, let's connect.
