Trade war with Canada has contributed to a significant decline in U.S. liquor sales
Jim Beam, one of the largest makers of American whiskey globally, is shutting down bourbon production at one of its Kentucky distilleries for a year.
The move comes amid Donald Trump’s trade war with Canada, which has contributed to a significant decline in U.S. liquor sales after the country ushered in a boycott of American booze, and as more young adults are cutting back on drinking.
Jim Beam, owned by Suntory Global Spirits, is one of Kentucky’s biggest bourbon producers.
The Bluegrass state’s $9 billion whiskey bourbon industry has been struggling to manage its abundant supply of liquor against the drop in demand.
You are extremely naive if you think tariffs will move production back to the US. Affordable the health care coverage for employers would have a much more profound effect.
The healthcare would be clever. But why do tariffs not work?
The idea behind tarrifs, is that they’ll make non-American goods more expensive than American goods, and people will choose the less expensive option.
The problem is, that’s not happening. There often isn’t a 100% American made option, most “made in the USA” still relies on material imports, which are tarrifed, so their prices went up too.
There isn’t enough US materials, so even if you source local aluminum, the demand has outpaced the supply, so the cost has gone up.
Then there’s labor, where manufacturing typically imports labor too, but they’re being deported, and domestic labor costs more, so prices have gone up.
Tarrifs only work if theres a ton of legislation impacting the companies themselves, because they will never take a voluntary decrease in profit.
So it’s also an additional tax that reduces American resource consumption which is a burden. But overall the idea should work. Step by step local producers can create products until everything can be sourced in the US.
Not really. Just tarrifs don’t work, because it would require companies to voluntarily reduce profits for a period of time, and publicly traded companies get sued by shareholders if they do stuff like that.
I don’t understand why. Do you mean that companies have to make investments in production lines in the US which reduces profits?
The shortage of local aluminum means that somebody can build a new plant because the tariffs allow them to make a profit.
Who? Which supplier do you think will tell their shareholders that they’re not getting huge dividends from the tariffs?
Do you understand anything about the aluminum market? That would be a starting point.
The issue isn’t willingness to invest, it’s constraints. The US doesn’t have much bauxite, and primary aluminum smelting needs huge amounts of very cheap, stable electricity. Building a new smelter costs billions and takes years.
I know that China tried to import via Mexico which the US already then tried to prevent.
Until the new plants are built everything with aluminium is more expensive. That’s inconvenient but the idea of moving production processes works.
???
The fuck does that have to do with anything?
We. Have. No. Ore. For. Aluminum.
Even if we did, we need power and new machinery that take decades to make.
Anecdotally, I know some folks who work under the UAW. Before/after a recent round of significant layoffs because of these big, beautiful tariffs, even the union leadership was spouting off how manufacturing would return to the US within years and it would be “worth it.” Some of the workers who already didn’t want to jump in bed with Trump ate it up. You would think at least leadership in a massive union overseeing any manufacturing/production would at least understand how this was a bad move for their whole organization, but here we are.
The whole reason why the auto sector exists in Canada is the lower health care costs.
GM alone spends $17M/year just on viagra for it’s employees.
Why should tariffs not work? What else could bring back manufacturing?
Surely if you want to force manufacturing back to a country via tarrifs you need to be smart and have a graduated tarrif over say 15 years increasing annually. That puts the market on notice but more importantly gives time for infrastructure and skills to be developed without immediately fucking over the population
There is no time for that. The military supposedly is preparing for a war with China as early as 2027, but more likely is 2030 when Europe wants to be ready for Russia.