May 2018

What do Beer, Toys and the Household & Commercial Products Association have in common?

The opinions in this column are the authors’ and do not represent the views of SPRAY Technology & Marketing.

It’s not often that the beer, toy and the household and commercial product industries face a common challenge, but nothing brings together strange bedfellows like tariffs. On March 1, 2018, President Trump announced his intention to impose a 25% tariff on steel imports and a 10% tariff on aluminum imports.

While Congress has the ultimate constitutional power over tariffs and trade, the president is using Cold War-era authority that allows him to impose trade restrictions and tariffs based on threats to national security. President Trump’s efforts to protect American jobs should be respected; however, imported aluminum and steel used to make aerosol packaging for consumer and commercial products is clearly not a threat to national security, in our respectful opinion.

We believe it is critical that the Household & Commercial Products Association (HCPA) stand up for its members’ economic interests and be among the first to throw down a marker on important issues such as these. That’s why on behalf of our members, HCPA sent a letter to President Trump and his advisors expressing our strong opposition to the proposed aluminum and steel tariffs. Essentially, these proposed tariffs will function as a tax that would significantly increase costs to manufacturers of aluminum and steel customers. Combined across industries, this will potentially cost American manufacturers billions of dollars, lead to the loss of jobs and raise the prices of common, everyday products that millions of consumers and workers rely on.

While these tariffs have the potential to affect all seven of HCPA’s Product Divisions, we know from talking to our Aerosol Division Board members that they would have a profoundly negative impact on the aerosol industry.

The aerosol industry makes a wide range of products that benefit the daily lives of nearly everyone in this country. In fact, many of the $180 billion annually of products manufactured by HCPA members rely on aerosol technology.

Aerosol manufacturing is an American powerhouse, with more than 90% being manufactured by and sold to American companies.[1] This industry relies heavily on high-quality steel and aluminum to ensure the safety and performance of its products; nearly all the estimated 3.75 billion aerosols manufactured in 2016 were made using either aluminum or steel. [2] HCPA analysis reports that in 2016, domestic manufacturers produced 3.02 billion steel containers and 811 million aluminum containers. 2

However, the container is not the only part of the aerosol that would potentially be impacted by a tariff. When looking at a valve, it’s important to keep in mind that there is a metal spring inside the assembly. This could dramatically impact the estimated 3.72 billion valves produced in the U.S.2

Typically, the benefits of tariffs are concentrated to a few while the costs are dispersed to many. Tariffs on aluminum and steel will decrease access to the best quality materials, slow innovation and artificially raise the cost of aerosol packaging, and thus the cost of aerosol products. Companies who produce the packaging or manufacture aerosol products will have to either absorb the cost, seek alternative sources of aluminum and steel that may not provide the same quality of material which we’ve all come to expect, or pass the cost along the supply chain, ultimately to the consumer.

HCPA is working with several prominent trade associations, including the National Retail Federation (NRF), Personal Care Products Council (PCPC), The Beer Institute, the Can Manufacturers Institute (CMI), and the Toy Association among others, as we all join to oppose these tariffs. It is critical that any tariffs be laser-focused on protecting national security, not taxing the materials manufacturers use to package everyday products that are integral to the daily lives of the American people. SPRAY

[1] Based upon 2001 – 2016 Consumer Specialty Products Association (CSPA) Aerosol Pressurized Products Survey.

[2] 2016 Consumer Specialty Products Association (CSPA) Aerosol Pressurized Products Survey, May 2017.