Home / General / Do We Want Any Aluminum Production in the United States?

Do We Want Any Aluminum Production in the United States?



Do we have any interest in having any industrial production left in the United States? This is not an abstract question. It’s a real one, at least concerning the aluminum industry. China is dumping aluminum on the global marketplace to effectively take over all international production, while Alcoa seeks to close U.S plants and move elsehwere. Prices for it are plummeting. It is seriously risking what is left of the aluminum industry in the United States. The United Steelworkers is urging the Obama administration to act to save their jobs:

An American labor union is pushing the United States to impose broad, steep tariffs on aluminum imports using a little-used but wide-ranging trade law that has riled the country’s trading partners in the past.

The effort by the United Steelworkers union comes with trade increasingly an election-year issue in the United States and elsewhere. More than three-quarters of the United States aluminum smelting industry that existed five years ago will have been idled or shut down by this summer as imports have surged, according to the union’s legal petition.

The union blames China’s rising exports, though if successful its effort would also affect American imports from Canada and many other countries.

The union’s law firm on Monday filed a petition covering raw aluminum imports with an American trade panel. The petition invokes Section 201 of the 1974 Trade Act. The section was last invoked by President George W. Bush in 2001 to start a legal process that led to American tariffs on steel imports the following year.

A Section 201 case covers essentially all imports of a product from all over the world. That makes it more substantial than anti-subsidy and anti-dumping cases against imports from a single country. The European Union objected to President Bush’s use of Section 201, which resulted in American tariffs on a wide range of steel products, until the administration dropped them in late 2003.

Why precisely is this necessary?

China, which already produces more than half the world’s aluminum, is expanding capacity even as its economy decelerates. The result has been a surge in exports and falling prices for aluminum.

Chinese exports of aluminum jumped more than 27 percent in the past two years, Chinese customs figures show.

A spokesman for the government-affiliated China Aluminum Association, who gave his family name as Zeng, said aluminum’s increasing use in high-speed railway equipment, aerospace and electronics justified China’s expanding production capacity and rising exports.

Smelters in Canada and elsewhere, having been displaced in their traditional international markets, have stepped up shipments of raw aluminum to the United States. American imports of raw aluminum from Canada, the biggest supplier, jumped 10 percent by tonnage last year, United States customs data shows.

So the fundamental question as Americans we have to ask ourselves is whether we want some union jobs to survive in this industry, not to mention the industry itself. To answer no has a major impact on the future of any industrial unionism and jobs policy. I know that free trading fundamentalists love to bathe themselves in moralistic language of saving the world’s poor through capitalism, but there’s a very real cost here, a cost that you as an American have to live with in your own country. It’s already contributing heavily to Trumpism. Continued economic instability for the working class is not only a moral problem of its own but a political problem that can’t be solved by vague discussions of more education, retraining programs that don’t provide a path forward, or ideas like UBI that might be a reality in 20 years but sure aren’t now. You have to answers for the USW right now about what happens to their workers.

We do need industry in this country. We need good jobs for people who do not have college educations. There are many positives to global trade, but there are also positives for industrial production at home. The two issues need to be balanced. The United States does need an aluminum industry.

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  • Scott P.

    Do we have any interest in having any industrial production left in the United States?

    We have more industry now than at any time in our history.

    That’s apart from the question of the aluminum industry specifically, but worth pointing out.

    • Dilan Esper

      Yep, and that’s quite apart from the issue of why it is so superior to make aluminum tubes rather than making prepackaged burritos for distribution to supermarkets or providing health care services.

      That said, I nonetheless think it is an outrage that Erik’s view, which I disagree with but is widely popular and which is a key issue of a key interest group, has never been embraced by a Democratic Presidential nominee in recent times. Money talks.

    • delazeur

      We have more industry now than at any time in our history.

      By what metric? People employed? Total production? Percentage of global manufacturing being done in the U.S.?

      • humanoid.panda

        Total production.

      • Brett

        Total production. Employment is down, although there’s a big split – non-unionized manufacturing employment is about where it was in the 1970s, while unionized manufacturing employment has shrunk heavily since the 1970s.

  • Denverite

    That’s not what I’d call a fantastic finish, Alcoa.

    • It’s a wrap!

      • Derelict

        I fear your attempt at humor was foiled.

  • pdge

    I believe that expanding the USA’s aluminum production capacity was considered to be a strategic priority in the past and a major driver of the hydropower plants of the TVA.

    China seems to be using the money that we give them via trade to undermine our industries. Quite a fascinating echo of what the USA did with the UK back in the day I think.

    In theory the USA would tax the imported Aluminum and transfer the money to the displaced workers. In reality I think that we are going to be into a round of Thatcher-ism and the permanently lower standard of living that resulted.

    How likely is it that we will see a revival of New Dealism and adoption of Fair Trade? In my view, with our current set of elites, it is not likely at all. Happy to be wrong and all that.

    • joel hanes

      [aluminum production was] a major driver of the hydropower plants of the TVA.

      Not sure about the TVA.

      The enormous dams on the Columbia, particularly Grand Coulee, generate so much hydropower that electricity was nearly free for decades; aluminum smelting requires enormous amounts of electrical power, and major ore deposits were in the West, so the aluminum industry (and Boeing) ended up in the PNW.

      Aluminum is still a strategic material for the defense/aerospace industries.

      • BigHank53

        Just south of Knoxville, TN is a small city named Alcoa. The TVA was very much intended to exploit the bauxite deposits of northern Alabama, and much of the hydropower in the south is owned by the Aluminum Corporation of America.

        • I used to work with the USWA local president at the plant there when I lived in Knoxville on Jobs with Justice stuff.

  • DilbertSucks

    Off-topic, but any chance we could get some weekly open threads here now that we’re nearing the general election season? There’s a bunch of stuff I want to rant about that hasn’t gotten a blog post.

    My most recent concern is this Charles Koch pseudo-endorsement of Hillary Clinton (Koch claims that Hillary might make a better president in some ways than Trump/Cruz) that many lefties, particularly Bernie supporters, are making viral.

    Is it not really obvious that this is a deliberate ploy by Koch to turn Hillary’s own base against her? I’m positive he has no intent of actually endorsing or voting for Hillary. He’s poisoning the well. He knows that progressives view him as the embodiment of corporate greed, and he wants to give renewed sustenance to the “Hillary is a corporate shill and no different from the Republicans” attacks that the Bernie faction has launched against her. He’s a brilliant propagandist and knows how to play leftists like a fiddle. What’s sad is watching so many on the left falling for his bait.

    While, yeah, it’s still early and I’m not certain that this particular attack will do permanent damage to Hillary, the fact is that her favorable ratings are underwater and she’s a vulnerable candidate. If leftists/liberals keep falling for these right-wing psyops and propaganda tactics throughout the general election, that damage is going to add up and narrow that gap between Clinton and Trump drastically. We need to wake up NOW and minimize the chances of this occurring.

    If you need proof, check out the nightmare that is Robert Reich’s Facebook. Reich himself is relatively fair to Hillary and will support her vs. Trump/Cruz, but most of the people who post on his page are not. Many of them push the BS that Trump is a “moderate,” that Hillary is no better than Trump/Cruz, the Sarandon line 4-8 years of Trump would galvanize the progressive movement, and so on.

    I just checked, and sure enough, Reich has posted about the Koch thing:


    This was another unfortunate recent post of his:


    I wish he would’ve at least added his own corrective by pointing that Trump’s foreign policy is in many ways more reckless and dangerous than Clinton’s (which is not free of problems), and that Trump’s “anti-Establishment” bluster is mostly a sales pitch to win over rubes. Sarah Palin did the same act back in 2008, as did many conservatives before her.

    Ugh. I know primary season isn’t over yet, but I don’t think it’s a good idea to let these sorts of uninformed talking points go unchallenged. Likewise, we have to wake more people up to the right-wing psyops tactics that keep getting deployed.

    • Thirtyish

      Off-topic, but any chance we could get some weekly open threads here now that we’re nearing the general election season? There’s a bunch of stuff I want to rant about that hasn’t gotten a blog post.

      What, the comment sections of posts touching on Hillary and/or Bernie in even a tangential way haven’t tended to turn into bloated Election ’16 free-for-alls enough already?

      ETA: That came off ruder than I intended. What you bring up in your comment is quite interesting, and not what I mean by contributing to a “bloated free-for-all.”

    • cpinva

      why yes, as a long time supporter of Ms. Clinton, the first thing I do in the morning, is to check on what the Koch bros. think of her, and plan my day accordingly. no doubt 90% of my fellow Clinton supporters do the same.

      yeah, no. if that’s their “plan” to defeat Ms. Clinton, they’re a lot dumber than I’ve given them credit for.

      • humanoid.panda

        I’d also add that while Koch is clearly trolling, what he says sounds rather reasonable to me. Of the two Republican candidates, the religous zealot who might not to be apocalypse-curious, and is a gold-bug to boot, is the more stable one! If I were a billionaire, and was thinking analytically and not with my ego/ideological priors, I’d definitely conclude that HRC, and Bernie, as long as he is constrained by a Congress that had not undergone a revolutionary transformation, was my better option.

        • twbb

          I still do not buy that Cruz is a religious zealot. I think if it ever comes down to his faith vs his own advancement, he will pick his own advancement every damn time.

          • ThrottleJockey

            Why if you’re Jesus Christ there’s no conflict at all!

            You clearly need to bone up on your prophecy, heathen.

    • JG

      If dopes are gonna avoid Hillary because of Koch than let them. These same dopes have also convinced themselves that Hillary will pick Kasich as her running mate because EVVVIL NEOLIBERAL.

    • If Hillary Clinton has no actual problem with her left flank, Republican “psy-ops” wouldn’t make a difference. If she does, the problem isn’t the Kochs taking advantage of it.

      If you, plural, are concerned about those votes, make an effort to win them. They’re persuadable voters to be appealed to the same way a campaign would go about appealing to any other group whose votes they need. They just need to do it.

  • BGinCHI

    On the plus side, people in my hometown, where there is a big ALCOA plant, have made a good living for a long time. That has changed in the last decade or better, but these were jobs that sent lots of kids to college, etc.

    On the negative side, my stepfather worked in that plant (and others of theirs in PA) for 25+ years. He died of mesothelioma just over two years ago, after a terrible, terrible struggle.

    That kind of work kills people. I’m not for getting rid of it, since there are dire consequences for the working class, but there are also dire costs.

    • Bruce Vail

      Yes, let us not overlook the human and environmental costs of aluminum production in the U.S. There seems to be a danger some times of romanticizing the old blue-collar manufacturing jobs as we watch them disappear to China and elsewhere.

      That said, it seems rather foolish to allow the aluminum industry to die here when we will need beer/soda cans by the billions well into the foreseeable future. To say nothing of warplanes…

    • DrDick

      Yeah. We had a local aluminum smelter close in NW Montana last year and, while it no qualifies as a superfund site, it was a major employer and economic engine in that part of the state, which has few opportunities, all in decline. It is the kind of thing I have mixed feelings about (much more so than about moving away from coal, oil, and gas, all of which also have a big impact here).

  • Derelict

    Even if we as a society decide “Eh, fuck the unions and those jobs,” we still need to keep domestic aluminum production. Considering how aluminum figures in damn near every weapon and weapon system the United States currently owns or is considering owning within the next 20 years, and considering how crucial aluminum is to a vast range of consumer products ranging from pop cans to popcorn poppers, we’d be setting ourselves up to be held hostage if China ever decided to embargo aluminum shipments to the U.S.

    Aluminum production–whether making it from raw bauxite or recycling it from dead beer cans and old airplanes–is not something you can just restart in a day or two if the need arises.

    • Brett

      You don’t need to restart it in a day or two if the Chinese cut off the supply. Aluminum can be stockpiled in strategic reserves for critical needs, up to and including a years-long cutoff due to war.

      In fact, now would be a good time to do that, while working out the dumping issue

    • efc

      Yes. I have seen the same argument made in regards to the Tata owned steel plants slated for closure in the UK. I think the govt has decided to take a 25% stake to save the company.

      It seems like there must be a strategic interest in keeping some sort of aluminum production here. Same as keeping some sort of steel industry in the UK.

      And strategic interests are certainly a worthy consideration apart from economics. Many of the arguments made for the TPP have been about America’s strategic position in Asia vis a vis China.

    • Diabolical_Engineer

      So this is actually fairly relevant to me (I’m a metallurgy grad student), but my understanding is that industry in the US has been moving away from primary production of materials (from raw ore) for quite a while. The largest component of this has been increased Chinese primary production of most of the main metals (iron, aluminum, magnesium, etc), but environmental concerns have also been a driving force. Reduction of metal ores typically generates a large amount of carbon dioxide ( this is unavoidable in most extractive metallurgy workflows).

      However, industry in the US still is responsible for most value added metal products (high strength alloys, specialty metals, etc) and recycling for both Al and steels is incredibly common. Metal processing isn’t going anywhere, but it is pretty likely that we will see less primary production than we have in the past.

      • CD

        Thanks for the reality check. There’s also a lot of smelting capacity around the world.

        Derelict’s “if China ever decided to embargo aluminum shipments to the U.S.” is idiotic on multiple levels. If things got to that point sourcing Al to build arms is probably the least of yer problems. This is not the 1940s.

        • BigHank53

          I agree that China is unlikely to embargo anything coming to the US; it’s hard to see how the people who sell things to China would be comfortable being paid in yuan for the next couple decades at least. Of course, conflict with China isn’t the only reason aluminum or other commodities could become drastically more expensive:

          1. Damage to port facilities makes loading or unloading of bulk cargo impossible. This could occur at either end.
          2. Climate change induced hurricanes make the cost of Pacific passage prohibitive.
          3. Other consumers start outbidding us.

  • Brett

    It’s worth at least trying the suit. I’m okay if the Chinese are better at producing aluminum cheaper than we can, but not okay if this is their government back-stopping aluminum producers in dumping aluminum below cost in order to avoid layoffs and production slow-downs (which is probably is, considering the economic slowdown in China this year).

    • xq

      From the perspective of the US, what difference does it make why China can sell aluminum cheaper?

    • JustRuss

      China has lax environmental and labor laws, and their workers don’t make anywhere near what an American union manufacturing job pays. Of course they can produce aluminum cheaper than we can. But I don’t buy the argument that our only options are to throw up our hands or enthusiastically join them in a race to the bottom in the name of free market purity.

      • cpinva

        “China has lax environmental and labor laws, and their workers don’t make anywhere near what an American union manufacturing job pays.”

        and apparently millions of their citizens who will happily condemn themselves to a slow, agonizingly painful death, all for the chance to make a barely livable wage, working in one of those plants. I believe China has finally hit upon a way to reduce their surplus population, without being obvious about it.

  • bobbyp

    Absent any effective public policy to counteract the loss of good paying jobs to those with a HS education or less, supporting the suit makes political sense.

  • There is indeed a jobs component to this, but this is also about national security. You can’t just restart these mines once they’re shut down. It takes as much as 18-24 months to get a facility back to fully operational.

    • CD

      This is about smelting, not mining. And there’s plenty capacity worldwide.

    • Just_Dropping_By

      Dissolving as much US warmaking capacity as possible through market forces is a global win-win in my view.

      • JG

        I’m sure Russia and China agree…

  • Breadbaker

    The biggest input in aluminum production, I’ve always understood, is the cost of electricity. China’s electricity has been among the dirtiest in the world; as someone pointed out, much of the aluminum industry in the US has been powered by hydro, BPA and TVA. And the environmental issues, as we’re increasingly understanding, are not respecters of borders. So basically, we’re poisoning the world for cheap aluminum.

    • Diabolical_Engineer

      The biggest input in aluminum production, I’ve always understood, is the cost of electricity.

      Yep. The main input to Al production is electricity, to the point that my extractive metallurgy professor joked that holding a chunk of aluminum is like holding a bunch of electricity in your hand. Cheap electricity equals cheap aluminum and if your power is produced cleanly, then Al production isn’t too damaging. If the power comes from coal, then it’s a lot worse.

  • Mr. Zeng’s defence of Chinese aluminium overcapacity smacks of desperation. How many hundred tonnes of aluminium does a multimillion-dollar plane or high-speed trainset use? Electronics? Don’t make me laugh. The total demand in high-tech is small. Aluminium has failed to displace steel in cars, which are a high-volume market. The future there is more likely to be carbon fibre.

    Incidentally, if loss-making Chinese aluminium companies are selling exports below cost, that’s dumping. Penalties would for once be justified, in contrast to solar panels where the Chinese have a real cost advantage.

    Cutting the material footprint of GDP is vital. It is not painless. Erik is advocating that Chinese workers should suffer more of the pain and American ones less. That’s am understandable position for an American, as the converse would be for a Chinese. I’m a Brit living in Spain. What’s the argument to convince me, or am I simply irrelevant?

    • JustRuss

      So if they sell aluminum below cost, that’s bad. But if their costs are low because they screw their workers and poison the environment, it’s all good?

      • cpinva

        “So if they sell aluminum below cost, that’s bad. But if their costs are low because they screw their workers and poison the environment, it’s all good?”

        that’s pretty much the basis for both NAFTA & TAPP, and all the manufacturing outsourcing that’s ever been done. on the flip side, if this ends up killing off the bulk of the populations of the target countries, from disease and starvation, we win, because our people are still alive and able to work. as well, we’ll have the “Black Plague” effect on labor, resulting in higher wages for everyone.


      • Screwing the workers: evidence? China is a huge country. You can’t generalise from Foxconn, an export light manufacturer on the coast with a largely female workforce, to heavy industry in the interior. Wages in China have been rising fast, quite unlike the USA.

        Poisoning the environment: agreed for coal-fired electricity. This is why carbon tariffs, as endorsed IIRC by Paul Krugman, are a good idea. Has Bernie proposed them or was it all too much like work? For other environmental crimes, it’s quite likely given the general behaviour of Chinese heavy industry, but again I’d like to see a source for aluminium.

        • JustRuss

          You’re avoiding the question. Is dumping the only situation in which protective tariffs are justified? Conventional wisdom seems to say yes, but I’m not sure I agree. I’m not an expert on the Chinese aluminum industry, so feel free to treat it as a hypothetical question.

        • Chinese wages may be rising fast but if you start near zero there’s nowhere to go but up.

    • Derelict

      While carbon fiber is (very) slowly displacing aluminum for some components on some aircraft, aluminum is still used for the primary structures and skins on most of the world’s airliners. It’s going to stay that way for at least another couple of decades. And don’t count on carbon taking over in the automotive industry–too expensive compared to traditional materials like steel.

      • Carbon fibre may not take over from steel in cars, but there is a lot of mileage to come in the technology so it may happen. Aluminium is a mature technology and it hasn’t managed to cut into steel’s share significantly, so it won’t take over.

        My point about planes and trains is not that aluminium is going to be replaced but that the volume is not large. An Airbus 380 costs ca. $375 million. It weighs 370 tonnes empty in the smaller variant. If that were all aluminium, and it isn’t (20% composites, engines, wiring, electronics, a/c, seats) the raw metal would be worth $0.6 million: pocket change. Of course, planes don’t use basic metal from the pot line but much more expensive high-strength alloys. Bur Erik was talking about the former, which is what the Chinese producers are dumping.

        • Correction: the Airbus 380 weight I quoted was the “maximum zero fuel” weight. I should have taken the “typical operating empty weight” of 277 tonnes. My point is unchanged.

          • If you want the weight of the plane itself minus fuel and payload you want the “empty weight”.

            “Zero Fuel Weight” = Empty Weight + Crew + Payload

            “Taxi Weight” = Zero Fuel Weight + Fuel

            “Takeoff Weight” = Taxi Weight – Fuel Burned Taxiing

        • pdxtyler

          Alcoa has signed a deal with Ford to provide the aluminum for Ford’s F-150 trucks. Aluminum usage in American automobiles is expanding rapidly as a way to make vehicles lighter to comply with federal mileage regulations. This is a big reason alcoa is splitting its value added plants into a separate company later this year.

  • Bruce Vail

    Not to derail the conversation, but about how many aluminum jobs are we talking about here?

    • Vance Maverick

      Here it says 2M metal and plastic workers overall, 31K “Metal furnace operators, tenders, pourers, and casters”. So possibly pretty low, if aluminum production is all in the latter category.

      Regardless of whether we hang on to a specific category of good jobs, we should also make more.

      • Bruce Vail

        Well, USW is not going to see any job growth with Alcoa. With Alcoa, its a question of slowing down the inevitable U.S. job losses as the company continues globalizing.

  • Lit3Bolt

    I live in Knoxville, TN, where there’s a ding dang town named for Alcoa right outside the county. People are extremely worried about this.

    Has the market ideology taken over so much that every US business person is incapable of thinking politically and strategically? Let’s outsource all of our technology, aerospace industry, and shipyards to China too. After all, they can do it so much more cheaply than we can.

  • Bruce Vail

    Apparently this is a fast-moving story:


    This news may have something to do with the fact that USW has members who work in the Canadian aluminum industry, who would be hurt by a crackdown on shipments of foreign finished aluminum into the US.

    • AMK

      We hear all day everyday from the free trade crowd about how these things create a “rules-based” world, an “international community” where offenders can be punished and punishments enforced. Yet here we find ourselves in a situation where we can’t “legally” differentiate between Canada and China without bringing the whole stack of paper crashing down. What a farce.

  • humanoid.panda

    If, as it seems, the Chinese are blatantly engaging in dumping subsidized by their government, then I think that even the hardest-core free trader would agree that yes, a tariff is a proper and necessary response.

    • mikeSchilling

      The hardest-core free trader would say “Cheap aluminum? Awesome! The market will find the most productive way to invest the savings from that without any (ptui!) government intervention.”

      • Brett

        The free trader would say, “What the Chinese are doing is wrong, but if they want to provide cheap subsidized Aluminum to American consumers, then we should eat our fill. Thank you Chinese taxpayer!”

    • xq

      Why? If you want to reduce the harmful distributional impact of trade, you should favor tariffs regardless of whether China is subsidizing its producers or its producers simply have a competitive advantage. Alternatively, if you think the gains from trade outweigh the negative distributional impact (or you don’t care about the distributional impact), that should also be true of the gains from China subsidizing its producers–it’s basically a wealth transfer from the Chinese government to American consumers. It neither case does the question of subsidy seem particularly relevant.

      • humanoid.panda

        Because, if I understand it right, the theory of relative advantage presumes that you are operating in distortion free market- and subsidies are a huge distortion.

        • xq

          It’s a distortion, but a distortion that favors the importing country at the expense of the exporting country. At least in the classical model. Basically for the reasons Just Dropping By gives below.

          I’ve seen arguments that we should fight back against dumping, not for the benefit of US industry, but for Chinese consumers.

    • Just_Dropping_By

      Nope. I can’t locate it at the moment, but Frederic Bastiat has an excellent essay explaining why free trade still makes just as much sense even if another country’s government is subsidizing its production. His point, as I recall, was that from the perspective of the purchaser, imported goods that are made cheaper by subsidies in the producing country are no different than imported goods that are made cheaper by natural forces in the producing country. His example, I believe, was that oranges grown in Portugal are cheaper than oranges grown in France because of the better weather in Portugal. Oranges grown in Britain would normally be much more expensive than those grown in France (since they can only be grown in greenhouses), but if the British government chooses to subsidize their production to make them cheaper than French oranges, what’s the difference between British oranges and Portuguese oranges from the perspective of the French consumer?

  • Dr. Ronnie James, DO

    “Bauxite vs. Voxite”

  • AMK

    Obama was in Europe today huddling with Cameron, Merkel, Hollande, and Renzi to talk about the various trainwrecks on that continnent. In the course of giving a speech, he talked about how rising economic anxiety was boosting neo-fascism and the far right accross the developed world….and then literally in the same sentence extolled the promise of the US-EU Transatlantic Trade Pact that will send every working person’s job to Romania. It was almost Paul Ryan-grade rhetorical bullshit.

    • humanoid.panda

      Thing is: Romania is a member of the EU trade zone, and not many jobs migrated there. So why would adding the US to that zone change things?

      (I am dubious of the benefits of things like the TPP, because they are trying to merge countries with very different economies, regulatory regimes, etc. However, I just don’t see how creating a free trade zone with the EU, a high regulation region is going to hurt American workers.)

  • yenwoda

    China, which already produces more than half the world’s aluminum, is expanding capacity even as its economy decelerates.

    Decelerate here means growing at 7% instead of 8%. Not exactly inconsistent with continuing to expand production capacity.

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