A Case for Granting a Tin Plate Steel Exclusion from Section 232 Tariffs in the 2023 Farm Bill
Constitution Partners has written extensively on the dire straits the U.S. food and agriculture sector finds itself in. This piece explored policy failures that have exacerbated food insecurity and led to increased foreign presence in US markets, while another piece provided a comprehensive overview of how our nation found itself – for the first time ever – as a net importer of food in 2023. We felt it worthwhile to continue exploring self-inflicted crises that have contributed to the perilous position our domestic growers, processors, and consumers find themselves in today.
In 2018, the Trump Administration imposed 25% tariffs on steel and aluminum imports. The Trump Administration was empowered to take this action by Section 232 of the Trade Expansion Act of 1962. Section 232 allows the President to impose import restrictions when those imports threaten national security. The Congressional Research Service explored these powers and authorities at length when the Administration was considering their use and updated this report in 2022. The Trump Administration’s action resulted in sweeping 25% tariffs on all steel imports into the United States, including a specialty material called ‘tin plate steel.’
Tin plate is a crucial material used for the production of cans for food products, such as containers for fruits and vegetables. However, tin plate steel is not a material relevant to national security, and is not produced in sufficient quantity domestically to meet our food manufacturing and consumption needs. A bipartisan group of 36 members of Congress recently wrote on this issue to the International Trade Commission citing a domestic production figure meeting only 50% of domestic demand. Despite this fact, tariffs remain on tin plate imports, resulting in the U.S. tin plate prices remaining the highest in the world.
When 40% of the overall cost of a can of fruit or vegetable is the steel can itself, tariffs on tin plate steel lead to increased prices for consumers and a rise in foreign finished food product imports into the United States, two issues covered extensively in the aforementioned Constitution Partners pieces.
Food prices have already reached some of their highest levels as of 2023 – and it’s important to note that canned fruits and vegetables sit at a much higher inflationary cost increase than fresh fruits and vegetables. As the bipartisan members of Congress wrote, “When food prices increase, canned food items become a crucial low-cost option for American families.” According to the president of the Consumer Brands Association, David Chavern, “The average American has about 24 canned goods stocked in the pantry at any given time. Nine in ten parents say they use at least some canned items to feed their families each week.”
Implementing tariffs on tin plate steel should be viewed as a 'poor tax' that raises the price of food, disproportionately affecting those who depend most on affordable, nutritious options.
Though strong policy statement on the surface, the Trump Administration failed to realize the unintended consequences these tariffs would have. Since then, no efforts have been made to correct these mistakes. These tariffs have harmed American consumers and the agriculture economy by incentivizing the importation of finished food can products over empty cans to fill with American fruits and vegetables. This has been a major contributing factor to the United States becoming a net food importer [see chart & explanation on page 51] for the first time in our nation’s history this year. A nation unable to sufficiently feed itself is a nation that makes itself subject to the will of foreign actors. Food insecurity arguably presents a graver national security threat than imports on tin plate steel – 90% of which comes from European allies.
The 2023 Farm Bill’s Trade Title presents an opportune platform to address this issue, as it plays a pivotal role in safeguarding American food security, protecting domestic growers and consumers, and ensuring the competitiveness of the food industry. According to the Congressional Research Service, Congress is already considering several trade-related issues typically outside the context of a farm bill, such as the U.S. Section 301 duties on Chinese goods. Previous farm bills have also directly adjusted trade and tariff laws. The Trade Title of the 2012 Farm Bill, for example, directly amended the Tariff Act of 1930, commonly referred to as the Smoot-Hawley Tariff Act, to add a new title to that law on softwood lumber. It would not be unprecedented to take action on this matter, such as through amending the Trade Expansion Act of 1962 to put limits on the Section 232 process, requiring congressional consultation, or wholly reversing these tariffs in a standalone, general exclusion of tin plate steel from the existing tariffs.
The Section 232 tariffs on steel and aluminum, while implemented with broader trade objectives in mind, have disrupted the American food industry's supply chain and harmed the American consumer reliant on affordable, shelf stable options for nutrition. As Congress works to review and reauthorize the programs within the five-year Farm Bill, it would be strategically wise to grant an exclusion for tin plate steel within the Trade Title of the 2023 Farm Bill. By doing so, we can protect American food security, support domestic growers and consumers, and ensure the competitiveness of the food industry. This categorical exclusion is not merely about addressing industry needs; it is a matter of national importance and national security, ensuring that all Americans have access to affordable and nutritious food, regardless of their economic status.
