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.