Subsidized Chinese aluminum production has soared in recent years.
The Trump administration has its eyes firmly on the prize when it comes to the U.S. Commerce Department’s Section 232 investigation into the national security implications of America’s steel import levels.
Yeah man. Their eyes are trained squarely on the prize.
Too often forgotten by the reporting on all that prize-eyeing, though, is the other Section 232 investigation underway: The one into aluminum imports. Commerce is working on that, too.
A few weeks ago Commerce held a hearing on the aluminum investigation. And industry executives and workforce representatives lined up to lay blame for the overcapacity problem on China’s doorstep.
Turns out, that’s basically the finding of a report from the U.S. International Trade Commission (ITC). Inside U.S. Trade reports the study was originally requested by the House Ways & Means Committee in February, and was recently made public after being submitted to Congress. Among its findings:
Despite having a fairly new aluminum industry, relatively high electricity costs in many regions, and a less developed consumer economy than many other countries where the industry is important, China is the world’s leading aluminum producer.
What has that meant for American aluminum producers? The report says smelter closures and worker layoffs. And how did that happen over in China? A whole lot of state support, man. The United Steelworkers commissioned a similar study recently that noted Chinese aluminum producers managed to double their output between January 2011 and July 2015, despite a drop in global prices, thanks to incentives like energy subsidies and low-cost loans from state banks.
What has that meant for the American aluminum industry? According to the Economic Policy Institute:
Since 2000, 18 of 23 domestic smelters have shut down and more than 13,000 good domestic production jobs have disappeared, and only two smelters are fully operational at this time. The domestic industry is literally on its last legs.
In response to receiving that ITC report on aluminum, Rep. Kevin Brady (R-Texas), the House Ways & Means Committee chairman, said its findings “will be tremendously valuable as lawmakers, industry participants, and Trump Administration officials work together to find targeted, effective, and appropriate solutions to the problem of Chinese overcapacity and other distortions in global aluminum markets.”
We sure hope so. And we hope that Section 232 investigation that President Trump’s Commerce Department is undertaking returns a finding that calls for tough measures to curb Chinese aluminum imports.