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The problem with tariffs explained by beer kegs

Beer kegs

There is only one company left in the United States that makes beer kegs. Cheaper imports from China (duh) and Germany (wut?) have kept a lid on American beer kegs, even as the craft brewing craze swept the country. Maybe American Keg would find relief in 25% tariffs on imported steel?

Not so fast. The government imposed a tariff on steel,  not beer kegs. Chinese and German keg manufacturers were unaffected by the tariff, while the price of American Keg's raw material, stainless steel, actually increased as American steel manufacturers got some breathing room on pricing, due to the tariff on imported steel.

When you look at a stainless steel keg that we make, it's all domestic steel, so we purchase all the steel here in the U.S. Once those tariffs were discussed and then implemented here, our pricing for the domestic steel started to go up. And the difference between an import keg and an American-made keg is greater than it was, say, four months ago or five months ago.
-- Paul Czachor, CEO of American Keg

Fast-forward twelve months and now the government is instituting new tariffs to help fix the old tariffs that raised prices and put people out of work. The government will begin taxing imported Chinese kegs at "up to" (a bit ambiguous) 79.7%, German kegs at 8.6% and Mexican kegs at 18.5%. Evidently Mexico is a problem now, too.

Needless to say, this new fix to the old fix won't actually fix anything, and nobody really knows what the overall impact of this government intervention will be. It surely won't be good for you and me.

-- Scrib