American Keg Company is the only manufacturer of beer kegs made from American steel that exists in the United States. It’s already a struggle for the business to maintain this model, but they do it out of a sense of patriotism, wanting to support American businesses first.
Their buyers, a majority of whom are craft brewers, share the same sentiment. They buy from AKC because they too want to support a domestic company, even if there is a slight premium to that which increases their costs a bit.
Now, though, thanks to Trump’s tariff boondoggle, American Keg Company is slowly going belly-up because the tariffs are having exactly the opposite effect they were supposed to, and AKC has already been forced to lay off 33% of their employees as a result.
Here’s how it was supposed to work: Trump increases prices on imported steel via added tariffs, causing the price of a beer keg made from foreign steel to go, just for example, from 5-15 dollars. Domestic steel-made kegs cost 8 dollars. Now, Foreign ones are too expensive so everyone buys American.
Here’s how it’s ACTUALLY working: Trump increases prices the same way, but domestic steel producers see the new market cost of foreign steel is high. They then raise their domestic steel price to make more profit for themselves, while still undercutting foreign prices. In the end, the cost of a domestic steel-made keg increases to 12 dollars.
This is the critically important part. The tariffs affect the cost of the raw steel, not the finished product. So, while the cost of a domestic keg just went up, the cost to import a fully-finished foreign-made keg did not increase and in the long run the imported keg is now substantially cheaper than an American-made one. American Keg Company just got priced out of the market by Donald Trump, and China and Europe will see a big increase in American demand for their kegs.
CEO Paul Czachor explains further:
Tariffs will inadvertently drive the price of American steel higher. Within a year, we might have to raise our prices so our kegs cost 30 percent more than an import. That puts the whole business in jeopardy.
Former employee Mark Foster, was among those laid off.
I had to hold back tears, and it was kind of embarrassing. I took it hard. I really took it hard. American Keg was my ticket. I was making my own money. It was a place where I could get my independence. Now that’s blown. It’s just a real hardship because where before, the money was coming in, and there was more food in the refrigerator, now my wife and I are trying to get the government to give us food stamps until work picks up. Why would you do that, Mr. President, when we would rather work than be on welfare?
That’s a great question, Mark. Why would Donald, who bills himself as the biggest super-genius business smarty pants, surrounded by all these other super smart business people in his cabinet, make such an elementary and fundamental mistake when it comes to his tariff plan?
In this writer’s opinion, the answer is simple. American interests want to see American businesses put out of business. Why? So they can be collected up and the scraps can be sold in fire-sales by vulture capitalists for short-term gain or integrated into existing corporations to profit from, while the employees that built them are on unemployment. Meanwhile, all the new profits made will be invested outside the nation. Perhaps in companies in China that make beer kegs — because they know that the Chinese company’s product will see a spike in demand.
Corporate America is not your friend, and the market will NEVER act in the best interest of the workers. The takeaway here is that Trump does not give a shit about any of us, and if he could sell the entire nation for free Big Macs for the rest of his life, he would.