How American aluminum can help us build back

As the pandemic has shown, we can’t rely on foreign production when it comes to critical industries

Stacks of empty aluminum cans sit on a pallet at a brewery in San Carlos, Calif., in June 2018. Policymakers must view the experience of the U.S. aluminum industry as a cautionary tale — and a way forward, Bless writes. (Justin Sullivan/Getty Images file photo)
Stacks of empty aluminum cans sit on a pallet at a brewery in San Carlos, Calif., in June 2018. Policymakers must view the experience of the U.S. aluminum industry as a cautionary tale — and a way forward, Bless writes. (Justin Sullivan/Getty Images file photo)
Posted August 31, 2020 at 6:00am

The coronavirus has required America to unite against the pandemic. As we confront a shortage of medical supplies necessary to protect us, we have learned that having a core industrial base saves lives and is essential to our security. This lesson has never been clearer than when, confronted with a shortage of ventilators, we found ourselves grateful to have domestic manufacturers to make up for it.

For decades, it was fashionable to believe that manufacturing was something to offshore to other countries and the market would simply replace those high-paying industrial jobs. But those replacement jobs never materialized, decimating America’s industrial heartland and shrinking our middle class. 

While policymakers work to onshore lost industrial production, Century Aluminum has fought to prevent the offshoring of a core American industry: primary aluminum. Even as we faced severe cost pressure from anticompetitive global actors, we have kept our smelters open in Kentucky and South Carolina.

Century’s smelters provide American workers with good paying jobs that allow them to break through to the middle class — the very jobs policymakers are focused on expanding. These smelters and our workers are invaluable to their surrounding communities, pouring money into coffee shops and car dealerships, and paying the tax dollars that support school systems.

I understand that the aluminum tariffs President Donald Trump imposed may not be popular with some. But as the U.S. examines how to restore its lost manufacturing capacity and expand access to the middle class, policymakers must view the experience of the aluminum industry as a cautionary tale — and a way forward.

At the start of World War II, there were fewer than 3,000 planes in the U.S. Air Force. By the end of the war, the U.S. had produced nearly 300,000 planes. Without President Franklin D. Roosevelt’s use of the Reconstruction Finance Corporation to expand domestic aluminum production by requisitioning and constructing new smelters, America wouldn’t have been able to produce the aluminum necessary to build the airpower that won WWII.

Today, the primary aluminum industry supports both national defense — providing the high-purity aluminum used in armored vehicles and planes — as well as critical infrastructure such as the electrical grid.

Many who appreciate the importance of aluminum to American security are nevertheless troubled by Trump’s tariffs on allies such as Canada. But while we appreciate our allies and their contributions to global security, they can also be competitors. Sometimes on trade matters, allies don’t always compete fairly.

Anyone familiar with trade knows that Canada has a strategic trade policy. Whether it’s dairy, softwood lumber or aluminum, Canada makes sure its producers are protected, even at the expense of American producers.

Yes, China has historically been a significant source of aluminum overcapacity, but as the Organization for Economic Co-operation and Development has illustrated, Canada subsidizes its aluminum industry too. Canadian aluminum fetches the same price as Chinese aluminum because there is a global price. As a result, Canadian subsidies can have the same damaging effects on the U.S. industry as Chinese subsidies. We can appreciate that Canadians are our allies while being aware of this shortcoming.

As part of the United States-Mexico-Canada trade negotiations, Ottawa agreed not to surge exports to the U.S. Yet imports from Canada have increased by over 95 percent since that commitment. Put simply, the Canadians broke their word and as a result U.S. workers are losing their jobs.

It’s no coincidence that during this surge, Canada announced at least two new subsidy programs for its aluminum industry, adding jobs and production at the expense of U.S. workers. This anticompetitive behavior already put 700 Americans in Ferndale, Washington, out of work, and threatens the American industrial base and thousands more American jobs.

We must recognize that without domestic primary aluminum capacity, there is no American aluminum supply chain security. Policies that concentrate production in Canada run counter to the pressing need to have core industrial capacity here in America. Many see the Defense Production Act as a critical tool for ensuring supply chain security. But the DPA cannot be applied to foreign smelters. Borders still matter. 

Nearly every tonne of primary aluminum made in the U.S. is consumed here, while Canada is exporting over 80 percent of its primary aluminum to the U.S. We do not target the Canadian market, but they target ours.

Allies work together toward a common goal. Our common goal should be for each country to have a sustainable industrial base to build a strong middle class. In breaking their word, the Canadians showed they do not share this common goal.

As the pandemic has shown, rebuilding America’s core industrial base will strengthen economic and national security and get millions of Americans back to work.

Mike Bless is the president and CEO of Century Aluminum, a publicly traded U.S. company and the largest U.S. producer of primary aluminum, employing thousands of American workers.