Business

Tariffs on Steel and Aluminum Impact Local Businesses

As the cans roll down the assembly line at Polar Beverages in Worcester, Massachusetts, one thing you can't see is the recent increase in cost to produce the company's popular seltzer and other soft drinks.

"We're at aluminum at a high right now," said Polar Beverages Executive Vice President Christopher Crowley. "We haven't seen it this high, ever."

The U.S. tariffs on steel and aluminum for Canada, Mexico and the European Union not only means retaliatory tariffs from those countries, but fears of a trade war leaving prices unsettled.

And local companies are caught in the middle, paying the price.

"There's so much uncertainty in the market and the tariffs just add fuel to the fire, so we went 76 cents a pound aluminum to $1.26," Crowley said.

Crowley says tariffs are not the only factor, but they add to a growing list of factors that have dramatically increased aluminum costs – including the April sanctions against Russia.

"This is the way the mischief spreads around the world once a trade war begins," said Babson College Economics professor Kent Jones.

Jones says consumers will begin seeing cost increases everywhere from the grocery store to the car dealership.

"When the president unilaterally raises tariffs on things like steel and aluminum, for example, that means anyone in this country who wants to buy steel and aluminum has to pay a higher price for it," said Jones.

"You have to raise prices," Crowley explained. "If you don't, you're going to have to shut your doors."

But Crowley is confident this won't be a permanent problem.

"It’'l settle down, it'll settle down," said Crowley. "It swings back and forth, the pendulum, and it'll get back to the middle somehow."

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