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.
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.
Autonomy is impossible, why do you think we have the global supply chain in the first place?
It’s abundantly clear that this is not your topic of expertise, tariffs or resource trade. Just quit digging the hole, man.
There are global supply chains because it is cheaper. There are unused Bauxit mines in the US. If Trump wants them to be used he has to use the tariffs. There don’t seem to be big reserves but in preparation of a war it makes sense. Sourcing it from Australia could be intercepted.