Food price inflation was clearly one of the key topics President Trump promised to fix during his campaign to reclaim the White House. There is one early fix that can have a significant impact in lowering prices involving canned foods.

This story begins over 60 years ago with the passage of the Trade Expansion Act of 1962. This landmark legislation grants the President authority to investigate trade practices and impose tariffs based on findings from agency investigations. During President Trump’s first term, an investigation under Section 232 of the Act led to a 25% tariff on imported Chinese steel. The tariff was designed to protect domestic steel manufacturers, including producers of tinplate—a specialized type of steel critical for manufacturing cans used in food packaging.

In the past two decades, domestic production of tinplate dwindled as consumer attitudes toward fresh foods lowered consumption of canned goods, until the COVID pandemic. Shoppers quickly rediscovered canned foods for the ease of preparation and extended shelf life as a hedge against supply chain issues involving fresh foods. Habits created during the pandemic now see families now regularly using canned fruits and vegetables and with their pantries loaded for the next emergency, causing food manufacturers to reluctantly pay more for imported tinplate to meet the demand.

Overall, the cost of canned fruits and vegetables have grown an amazing 37% since 2018 largely due to the cost of imported tinplate.

The result has had a dramatic impact on the cost of canned foods. For example, 41% of the cost of a 15 oz. can of corn is in the can with only 20% of the cost in the raising and production of the corn in the can. Compared to prices in 2018 to now, the cost of that can of corn has increased 22%. Overall, the cost of canned fruits and vegetables have grown an amazing 37% since 2018 largely due to the cost of imported tinplate.

Meanwhile, projections are that U.S. canned food market size will grow at a compound annual growth rate of 5.5%.

Once in office, President Trump can grant a temporary exemption to Section 232 of the old Trade Expansion Act to remove the tariff, while encouraging new domestic production of the essential tinplate. This would have a significant impact on lowering the cost of canned goods to consumers quickly.

The alternative is a growing reliance for mitigating canned food prices by importing finished canned foods from other countries. This negatively impacts U.S. canned food companies and the jobs associated with growing and processing fruits and vegetables.

At Creative Energy, we are deeply engaged with food companies, including those who put food in cans. We help face their challenges with a strategic eye to make their brands more competitive. If you are facing a challenge in search of solutions, we would love to have a conversation.