A dive down the rabbit hole of what it actually takes to make a seemingly simple supermarket product - and what happens when that product gets embroiled in a trade war
Attending the Assoc for Heterodox Economics Conference at KCL, one excellent speaker, Sean Starrs, described the U.S. power of Techno-Nationalism that allows the U.S. to have a choke-hold over the delivery of Dutch chips to China. (You have written eloquently about ASML in Material World) who are thus prevented from supplying China (as I understand it). While this maybe true - coming back to raw materials and metal - a choke-hold only works in wrestling up to the point the opponent fights according to the rules. The below-the-belt move China has is that they can indeed wield great power via their Rare Earth supply without which certain parts in the F35 (as a tiny example) cannot be made, endangering production of the entire aircraft. Mr Trump believes the U.S. can make its own Rare Earth (Lanthanide) elements because they are abundant in nature. But exactly like the specificity of the steel issue you have outlined above, there is a shortage of process (not a shortage of metal). If only China presently separates Terbium and Dysprosium within the lanthanide group - both intrinsic to make the permanent magnets required by the F35 - then the other rather sophisticated hi-tech is likely to remain on the runway. I have never been a great fan of globalisation but without free trade the issues you have pointed out will multiply. Yes, we all know Rare Earths might be under the ground in our back gardens - but try making a factory to separate each of the 15 elements as you leach them with Hydrochloric Acid and pour the waste into the Thames (as China pours it into the Yellow River) - it’s highly polluting and in China the environment pays the price. If the U.S. (and others have made this point) wants to onshore all Rare Earth production, doing it right would make a kilo of terbium, dysprosium, neodymium etc many hundred per kg more expensive thus making the F35 Campbell’s Soup Can of the sky unsustainable and impossible to build.
We’ll, good thing the USA isn’t a democracy then! I’m sure the new authoritarian rendition of the USA could stick around long enough. Hey, it worked for China’s and Russia’s leaders. Why not the USA? But ole Donny Trump won’t be the person to see it through. Maybe one of his kids can hang in power long enough to bring back all that precious manufacturing. We could become the cheap labor source for China and India! Wouldn’t that be grand!
I work in the TATA site in South Wales that makes DWI steel for can making. It's a specialised steel for food cans. Hopefully they can come to some sort of tariff agreement with the US.
As a direct aside to this excellent article, it 'ain't just soup'. (And tinned plate)
Prominent in the news here in Canada is this story, albeit it's appearing in the US press as well:
Impact of New U.S. Tariffs on Aluminum and Steel: What It Means for Craft Brewers
[...]
[U.S. craft brewers could be significantly affected by these tariffs and any potential retaliatory measures.
The U.S. imports more aluminum from Canada than any other country. Even though Canada was excluded from the 232 tariffs in 2018, the price of raw aluminum still rose, impacting the cost of aluminum cans. With no countries exempt from these new tariffs, aluminum prices are expected to increase further.
[...]
According to a statement earlier this year from the Aluminum Association, the U.S. sources around two-thirds of its primary aluminum from Canada. U.S. smelters, even when operating at full capacity, cannot produce enough aluminum to meet demand. Additionally, about 90% of U.S. scrap aluminum comes from Canada or Mexico. Achieving full self-sufficiency in aluminum production would require billions in investment over decades.
Canada is also the largest steel supplier to the U.S., followed closely by Mexico. Together, these two countries account for nearly 40% of U.S. steel imports. The 25% tariffs on steel could have a global impact on aluminum prices and directly affect U.S. manufacturers of steel products.]
[...]
- Attribution: Article Retrieved from Brewers Association, written By Katie Marisic .
- Attribution: Article Retrieved from Brewers Association, written By Katie Marisic .
Tariffs Spell Trouble for Cans: ‘We Can’t Absorb Those Costs’
Food and beverage companies say new tariffs on steel and aluminum will raise the cost of their containers. They say consumers are likely to pay the difference.
Your readers might appreciate this recent historical background on the production of DWI cans, with a reference to the important contribution of Bill Coors (of Coors Beer) in the development of aluminum cans.
The global aluminum cans market was valued at USD 45.6 billion in 2021 and is projected to reach USD 94.5 billion by 2035, according to GlobeNewswire.
Metal Cans Market:
The global metal cans market, which includes DWI cans, was valued at $65.37 billion in 2022 and is projected to reach $105.51 billion by 2030 according to Grand View Research.
South Wales was renowned for its tin plate plants in the 19th Century so good to see the tradition has been carried to an even higher level and might not raw UK steel but i suspect there is a good value add in processing it.
It is a warren out there. Smile. And in our own back gardens. UK electricity prices highest in developed world? Why? Presumably gas price?
Stored food... I remember Corned Beef came half way round the world made conveniently possible especially during war and rationing. There was an issue with solder if I remember, which could make tins cumulatively toxic. (See early exploration in the arctic.)
And ultra-modern diets have brought there own cascade of downsides. Generational? (gregvp makes a point in comment below.) Or possibly a rush over the edge? The Age of Information meets Total Uncertainty?
Attending the Assoc for Heterodox Economics Conference at KCL, one excellent speaker, Sean Starrs, described the U.S. power of Techno-Nationalism that allows the U.S. to have a choke-hold over the delivery of Dutch chips to China. (You have written eloquently about ASML in Material World) who are thus prevented from supplying China (as I understand it). While this maybe true - coming back to raw materials and metal - a choke-hold only works in wrestling up to the point the opponent fights according to the rules. The below-the-belt move China has is that they can indeed wield great power via their Rare Earth supply without which certain parts in the F35 (as a tiny example) cannot be made, endangering production of the entire aircraft. Mr Trump believes the U.S. can make its own Rare Earth (Lanthanide) elements because they are abundant in nature. But exactly like the specificity of the steel issue you have outlined above, there is a shortage of process (not a shortage of metal). If only China presently separates Terbium and Dysprosium within the lanthanide group - both intrinsic to make the permanent magnets required by the F35 - then the other rather sophisticated hi-tech is likely to remain on the runway. I have never been a great fan of globalisation but without free trade the issues you have pointed out will multiply. Yes, we all know Rare Earths might be under the ground in our back gardens - but try making a factory to separate each of the 15 elements as you leach them with Hydrochloric Acid and pour the waste into the Thames (as China pours it into the Yellow River) - it’s highly polluting and in China the environment pays the price. If the U.S. (and others have made this point) wants to onshore all Rare Earth production, doing it right would make a kilo of terbium, dysprosium, neodymium etc many hundred per kg more expensive thus making the F35 Campbell’s Soup Can of the sky unsustainable and impossible to build.
Yes, tariffs are a generational project. I doubt that any democracy has the persistence of vision to see them through for the thirty years required.
We’ll, good thing the USA isn’t a democracy then! I’m sure the new authoritarian rendition of the USA could stick around long enough. Hey, it worked for China’s and Russia’s leaders. Why not the USA? But ole Donny Trump won’t be the person to see it through. Maybe one of his kids can hang in power long enough to bring back all that precious manufacturing. We could become the cheap labor source for China and India! Wouldn’t that be grand!
I work in the TATA site in South Wales that makes DWI steel for can making. It's a specialised steel for food cans. Hopefully they can come to some sort of tariff agreement with the US.
As a direct aside to this excellent article, it 'ain't just soup'. (And tinned plate)
Prominent in the news here in Canada is this story, albeit it's appearing in the US press as well:
Impact of New U.S. Tariffs on Aluminum and Steel: What It Means for Craft Brewers
[...]
[U.S. craft brewers could be significantly affected by these tariffs and any potential retaliatory measures.
The U.S. imports more aluminum from Canada than any other country. Even though Canada was excluded from the 232 tariffs in 2018, the price of raw aluminum still rose, impacting the cost of aluminum cans. With no countries exempt from these new tariffs, aluminum prices are expected to increase further.
[...]
According to a statement earlier this year from the Aluminum Association, the U.S. sources around two-thirds of its primary aluminum from Canada. U.S. smelters, even when operating at full capacity, cannot produce enough aluminum to meet demand. Additionally, about 90% of U.S. scrap aluminum comes from Canada or Mexico. Achieving full self-sufficiency in aluminum production would require billions in investment over decades.
Canada is also the largest steel supplier to the U.S., followed closely by Mexico. Together, these two countries account for nearly 40% of U.S. steel imports. The 25% tariffs on steel could have a global impact on aluminum prices and directly affect U.S. manufacturers of steel products.]
[...]
- Attribution: Article Retrieved from Brewers Association, written By Katie Marisic .
- Attribution: Article Retrieved from Brewers Association, written By Katie Marisic .
Further to above, up at this time at the NYTimes:
Tariffs Spell Trouble for Cans: ‘We Can’t Absorb Those Costs’
Food and beverage companies say new tariffs on steel and aluminum will raise the cost of their containers. They say consumers are likely to pay the difference.
Time to package soup in plastic 👌😅
Ironically, 'tin' cans are lined with a 'plastic' (epoxy resin) coating so as to prevent the contents from corroding the metal.
Your readers might appreciate this recent historical background on the production of DWI cans, with a reference to the important contribution of Bill Coors (of Coors Beer) in the development of aluminum cans.
https://www.cantechonline.com/feature/29670/the-birth-of-dwi-technology/
Market Size:
The global aluminum cans market was valued at USD 45.6 billion in 2021 and is projected to reach USD 94.5 billion by 2035, according to GlobeNewswire.
Metal Cans Market:
The global metal cans market, which includes DWI cans, was valued at $65.37 billion in 2022 and is projected to reach $105.51 billion by 2030 according to Grand View Research.
South Wales was renowned for its tin plate plants in the 19th Century so good to see the tradition has been carried to an even higher level and might not raw UK steel but i suspect there is a good value add in processing it.
So why not package soup in aluminum cans?
Aluminum is even harder hit by US tariffs. see my post above.
It is a warren out there. Smile. And in our own back gardens. UK electricity prices highest in developed world? Why? Presumably gas price?
Stored food... I remember Corned Beef came half way round the world made conveniently possible especially during war and rationing. There was an issue with solder if I remember, which could make tins cumulatively toxic. (See early exploration in the arctic.)
And ultra-modern diets have brought there own cascade of downsides. Generational? (gregvp makes a point in comment below.) Or possibly a rush over the edge? The Age of Information meets Total Uncertainty?