Commentary: The right deal for America and US aluminum

Last week, President Donald Trump signed a proclamation strengthening existing Section 232 aluminum tariffs that he originally implemented in 2018 on national security grounds.

There’s a lot to like and a lot we support in the president’s action. Though—and this is critical—for our industry’s growth, and for national security, we must maintain tariff-free access to aluminum from Canada.

The Aluminum Association welcomes the Trump administration’s focus on this critical material and our industry’s ability to compete. We want and need to open new smelting capacity in the United States, which is President Trump’s intent. It’s been 45 years since the U.S. built a new primary aluminum smelter. Strategic use of these tariffs—paired with unleashed American energy—could help get us there. However, it would take many years before we could smelt all of the metal our economy and our military depend on today. That’s why we need the action from the White House and a reliable source of metal from Canada to support the jobs and investments happening today.

Reopening smelting capacity will strengthen our national defense, but smelters don’t make fighter jets. Our security also depends on a robust downstream industry that makes all the components of cars, trucks, planes, body armor and, yes, beer cans. And these products support 98 percent of all U.S. aluminum jobs. The aluminum supply chain for defense is the same one that produces the commercial products all around us, and we will not have one without the other.

During his first term, Trump was early to recognize these facts. He understands the genuine threat that nonmarket actors like China and their proxies pose to U.S. manufacturing and the defense industrial base, including critical materials like aluminum. His leadership helped spur more than $10 billion in aluminum industry investment since 2016 to make the products Americans rely on. Much of that investment is underpinned by our strategic use of Canada’s aluminum sector and the integrated North American supply chains. Both [were] strengthened by President Trump through the USMCA [United States-Mexico-Canada Agreement] in his first term.

Thanks to Trump’s past actions, aluminum is growing in America—but America also needs Canadian metal for the foreseeable future.

The Feb. 10 presidential proclamation does four main things effective March 12:

1. Extends Section 232 tariffs to cover downstream aluminum products. Today, too many countries are circumventing trade rules and enforcement by using unfairly produced and traded aluminum in end products that then make their way across the U.S. border. Not everyone is a bad actor, but we need consistent rules to ensure that trading partners don’t undercut American manufacturers by using unfairly produced and discounted inputs that should be excluded from our market.
2. Adjusts Section 232 tariff rates from 10 percent to 25 percent. The original Section 232 program provided significant relief to U.S. aluminum firms. The tariffs did not open any new smelters but did help spur historic new investment in downstream manufacturing. Artificially discounted metal from China, Russia and other nonmarket economies is the root cause of recent industry challenges. The problem is exacerbated when third countries “trans-ship” this metal into the country in violation of our trade laws. We’ve seen in the past that across-the-board tariffs can impact the market, so this increase in tariff rates is something we will need to carefully monitor.
3. Revokes all Section 232 country exemptions. During a time of significant expansion, the nation and our industry need metal. Today, about two-thirds of the primary aluminum America uses comes from Canada because we do not have enough domestic smelter capacity—or the energy needed to build more smelters in the near term. Every aluminum smelting job in Canada supports 13 aluminum jobs in the United States. And the metal we import is equivalent to the energy generated by at least four Hoover Dams. Any future action in the region must ensure ready and affordable metal supply for U.S. aluminum firms so we can make our products here at home.
4. Revokes all Section 232 product exclusions. This is a complex issue that affects individual companies in different ways. While the industry is still working to understand the full impact of this change, we believe that all existing and forthcoming exclusions for Chinese aluminum imports should be rescinded.

The good news? Trump is closing the loopholes that harm our industry and can now strike a deal to secure our input materials while defending the U.S. industry and jobs.

So where do we go next? America's aluminum workers stand ready to command global markets under Trump's leadership. This deal stops the flow of Chinese metal into the U.S. through downstream products and Chinese exclusions. It will allow our industry to build on the foundation that Trump laid in his first term and moved to strengthen with last week’s action. Taking advantage of our closest regional resources represents more than smart trade policy—it provides the foundation for sustained American industrial dominance.

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Let’s make the deal, secure the win and protect America’s national security, jobs and industry.

As president and CEO of the Aluminum Association, Charles “Chuck” Johnson serves as the chief advocate for the full aluminum value chain in the United States, which supports hundreds of thousands of American workers. The association’s 120+ members make 70 percent of the aluminum and aluminum products shipped in North America.