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.
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?
All, unless they increase prices.
It’s aluminium producers who profit from the tariffs, not buyers.
Exactly. Tariffs drive prices up, and non-tariffed producers are incentivized to also raise prices, because it’s pure profit that will go out as fat checks to their shareholders and execs.
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.
It means that the US has tried to stabilize prices for aluminium for some time.
If there is no ore then autonomy is impossible. But the tariffs will make sure that as much aluminium as possible is recycled.