Essay supply management

The Washington Post

Wonkblog

By By Heather LongHeather Long

Michael Bless is chief executive of Century Aluminum, America's second-largest aluminum producer. Last Michael Bless is chief executive of Century Aluminum, America's second-largest aluminum producer. Last

week he called the manager of the company's plant in the Netherlands and asked him to go down to the docks week he called the manager of the company's plant in the Netherlands and asked him to go down to the docks

and check out the scene.and check out the scene.

The employee called Bless back to say European aluminum — not made by Century — was everywhere. It was The employee called Bless back to say European aluminum — not made by Century — was everywhere. It was

piled in warehouses and getting loaded onto boats. It's impossible to know exactly where that metal is headed, piled in warehouses and getting loaded onto boats. It's impossible to know exactly where that metal is headed,

but there's a high likelihood it's bound for the United States.but there's a high likelihood it's bound for the United States.

Aluminum imports hit an all-time high last year after President Trump repeatedly threatened to put tariffs on Aluminum imports hit an all-time high last year after President Trump repeatedly threatened to put tariffs on

aluminum and companies rushed to get foreign metals into the United States.aluminum and companies rushed to get foreign metals into the United States.

Trump has been close to taking dramatic action to restrict aluminum and steel imports into the United States, Trump has been close to taking dramatic action to restrict aluminum and steel imports into the United States,

and using tariffs, quotas or some other mechanism to boost the domestic industry. On Thursday, Trump was and using tariffs, quotas or some other mechanism to boost the domestic industry. On Thursday, Trump was

slated to announce new trade moves, but the slated to announce new trade moves, but the announcement was postponed — but not canceled — after a last-announcement was postponed — but not canceled — after a last-

ditch push from lawmakersditch push from lawmakers..

In anticipation of the restrictions, there has been a similar import frenzy to kick off 2018. Aluminum In anticipation of the restrictions, there has been a similar import frenzy to kick off 2018. Aluminum

shipments from the European Union to the United States are up 24 percent from the start of the year shipments from the European Union to the United States are up 24 percent from the start of the year

through last week, according to Panjiva, a company that tracks global trade data and was recently acquired by through last week, according to Panjiva, a company that tracks global trade data and was recently acquired by

S&P Global.S&P Global.

“Our sources tell us there's at least half a million tons between big European and Asian ports being loaded “Our sources tell us there's at least half a million tons between big European and Asian ports being loaded

onto ships. That metal will be in the U.S. in two weeks' time,” Bless said.onto ships. That metal will be in the U.S. in two weeks' time,” Bless said.

America imports 90 percent of the aluminum that U.S. companies use to make products as diverse as beer America imports 90 percent of the aluminum that U.S. companies use to make products as diverse as beer

cans and fighter jets. Trump is hungry to change that by reviving the domestic aluminum industry. He says it's cans and fighter jets. Trump is hungry to change that by reviving the domestic aluminum industry. He says it's

a matter of national security, a rarely used argument. The last time the United States restrained imports a matter of national security, a rarely used argument. The last time the United States restrained imports

because of national defense concerns was on machine tools in 1983.because of national defense concerns was on machine tools in 1983.

“The U.S. says this is about national security. That exception has never been invoked since the World Trade “The U.S. says this is about national security. That exception has never been invoked since the World Trade

Organization came into existence in 1995,” said Jennifer Hillman, a Georgetown law professor and former Organization came into existence in 1995,” said Jennifer Hillman, a Georgetown law professor and former

member of the WTO's Appellate Body. “This is uncharted waters.”member of the WTO's Appellate Body. “This is uncharted waters.”

The Trump administration argues there have been rapid changes in the aluminum industry in recent years as The Trump administration argues there have been rapid changes in the aluminum industry in recent years as

China began producing the metal and selling it on the world market at prices with which U.S. companies have China began producing the metal and selling it on the world market at prices with which U.S. companies have

struggled to compete. The United States has gone from having 23 operational aluminum smelters in 1993 struggled to compete. The United States has gone from having 23 operational aluminum smelters in 1993 to to

five nowfive now, according to the U.S. Geological Survey., according to the U.S. Geological Survey.

Only one of the remaining smelters — the Century Aluminum plant in Hawesville, Ky. — makes the high-Only one of the remaining smelters — the Century Aluminum plant in Hawesville, Ky. — makes the high-

purity aluminum needed for fighter jets, according to a Commerce Department purity aluminum needed for fighter jets, according to a Commerce Department reportreport urging Trump to take urging Trump to take

action.action.

If that plant shutters, the United States would have to rely on factories overseas. Only the United Arab If that plant shutters, the United States would have to rely on factories overseas. Only the United Arab

Emirates and China produce what's needed for the military, although Canadian smelters might be able to shift Emirates and China produce what's needed for the military, although Canadian smelters might be able to shift

production to do it, as well.production to do it, as well.

“You see what's happened with our steel and aluminum industries. They're being decimated by dumping from “You see what's happened with our steel and aluminum industries. They're being decimated by dumping from

many countries,” Trump said in February. “They're dumping and destroying our industry and destroying the many countries,” Trump said in February. “They're dumping and destroying our industry and destroying the

families of workers. And we can't let that happen.”families of workers. And we can't let that happen.”

The president argues it's worth paying a tad more for your beer or car if it means an American can keep a The president argues it's worth paying a tad more for your beer or car if it means an American can keep a

good-paying job in a metal factory. Bless has told the Trump administration that he'll hire 300 workers in good-paying job in a metal factory. Bless has told the Trump administration that he'll hire 300 workers in

union jobs at union jobs at Hawesville, Ky., plantHawesville, Ky., plant as soon as Trump makes the tariff announcement. Those jobs would pay as soon as Trump makes the tariff announcement. Those jobs would pay

about $60,000 a year plus benefits.about $60,000 a year plus benefits.

“People are hopeful the jobs come back. These are good jobs,” said Andy Meserve, a longtime maintenance “People are hopeful the jobs come back. These are good jobs,” said Andy Meserve, a longtime maintenance

worker at the Hawesville plant and president of United Steelworkers Local 9423. “Trump did pretty good in worker at the Hawesville plant and president of United Steelworkers Local 9423. “Trump did pretty good in

Kentucky.”Kentucky.”

The Hawesville plant is running at about 40 percent capacity. Century Aluminum laid off hundreds of The Hawesville plant is running at about 40 percent capacity. Century Aluminum laid off hundreds of

workers there three years ago when global metal prices plummeted. Prices have since rebounded, but the workers there three years ago when global metal prices plummeted. Prices have since rebounded, but the

company says it would have to make an “enormous investment” to get back to full production levels and it company says it would have to make an “enormous investment” to get back to full production levels and it

won't do that unless Trump restricts imports.won't do that unless Trump restricts imports.

But industries that use aluminum say there's an ugly trade-off: Manufacturing jobs in the auto and aerospace But industries that use aluminum say there's an ugly trade-off: Manufacturing jobs in the auto and aerospace

industries might go away if the cost of aluminum rises too much. The aluminum smelting jobs that Trump industries might go away if the cost of aluminum rises too much. The aluminum smelting jobs that Trump

wants to save account for wants to save account for 3 percent3 percent of the total aluminum industry jobs in the United States, according to the of the total aluminum industry jobs in the United States, according to the

Aluminum Association. The other 97 percent of jobs (about 156,000) are in downstream industries that take Aluminum Association. The other 97 percent of jobs (about 156,000) are in downstream industries that take

the raw metal and make something new with it.the raw metal and make something new with it.

Jobs are central to the fierce debate in White House over what to do about steel and aluminum. Opponents of Jobs are central to the fierce debate in White House over what to do about steel and aluminum. Opponents of

sweeping tariffs argue that such action would backfire by hurting employment in other industries, especially if sweeping tariffs argue that such action would backfire by hurting employment in other industries, especially if

nations retaliate and put tariffs on U.S. agriculture or airplanes.nations retaliate and put tariffs on U.S. agriculture or airplanes.

There's a lobbying frenzy, including from GOP lawmakers, to get Trump not to impose the tariff or, at a There's a lobbying frenzy, including from GOP lawmakers, to get Trump not to impose the tariff or, at a

minimum, to carve out certain types of aluminum and steel. Trump met Tuesday with Republicans in minimum, to carve out certain types of aluminum and steel. Trump met Tuesday with Republicans in

Congress, many of whom voiced concerns about a sweeping tariff and how it could affect jobs and profits in Congress, many of whom voiced concerns about a sweeping tariff and how it could affect jobs and profits in

their home states.their home states.

Rep. Kevin Brady (R-Tex.) said in a statement after the Tuesday meeting, “I’m also committed to working with Rep. Kevin Brady (R-Tex.) said in a statement after the Tuesday meeting, “I’m also committed to working with

the president on narrow and targeted remedies that address China’s distortions without hurting other U.S. the president on narrow and targeted remedies that address China’s distortions without hurting other U.S.

industries and workers.”industries and workers.”

The aerospace industry has been one of the most vocal about what could go wrong if Trump imposes a blanket The aerospace industry has been one of the most vocal about what could go wrong if Trump imposes a blanket

tariff on all aluminum imports. The United States is a top exporter of airplanes and airplane parts. It's one of tariff on all aluminum imports. The United States is a top exporter of airplanes and airplane parts. It's one of

the key areas in which America runs a trade surplus, but it's also an industry that uses a lot of aluminum.the key areas in which America runs a trade surplus, but it's also an industry that uses a lot of aluminum.

“Anything that is going to disrupt the global supply chain that our industry accesses and potentially raise costs “Anything that is going to disrupt the global supply chain that our industry accesses and potentially raise costs

creates a great deal of concern,” said Remy Nathan, vice president of international affairs at the Aerospace creates a great deal of concern,” said Remy Nathan, vice president of international affairs at the Aerospace

Industries Association. He has told the administration to be careful not to “turn around and harm another Industries Association. He has told the administration to be careful not to “turn around and harm another

part of the economy that is critical for economic and national security.”part of the economy that is critical for economic and national security.”

The Department of Defense recently The Department of Defense recently sent a lettersent a letter arguing that “targeted tariffs are more preferable than a arguing that “targeted tariffs are more preferable than a

global quota or global tariff.”global quota or global tariff.”

Canada, a close ally, is the top country the United States imports aluminum from by a wide margin. Russia is Canada, a close ally, is the top country the United States imports aluminum from by a wide margin. Russia is

No. 2 and China is fourth. Trump talks often about wanting to go after China, but the proposed tariff or quota No. 2 and China is fourth. Trump talks often about wanting to go after China, but the proposed tariff or quota

would harm Canada and Europe, too.would harm Canada and Europe, too.

“We have urged the president to exclude specialty steel and aluminum imports if he decides to go down the “We have urged the president to exclude specialty steel and aluminum imports if he decides to go down the

tariff route. If not, it could be extraordinarily burdensome for smaller companies,” said Ann Wilson, senior tariff route. If not, it could be extraordinarily burdensome for smaller companies,” said Ann Wilson, senior

vice president of government affairs at the Motor & Equipment Manufacturers Association, which represents vice president of government affairs at the Motor & Equipment Manufacturers Association, which represents

1,000 U.S. auto parts suppliers.1,000 U.S. auto parts suppliers.

She says some aluminum products used in cars aren't available in the United States and must be imported, She says some aluminum products used in cars aren't available in the United States and must be imported,

but she argues those imports support more than 870,000 American auto parts jobs since workers modify or but she argues those imports support more than 870,000 American auto parts jobs since workers modify or

assemble those products into larger car parts.assemble those products into larger car parts.

The more carve-outs the Trump administration achieves, the more complex it will be to enforce what is The more carve-outs the Trump administration achieves, the more complex it will be to enforce what is

allowed through the border.allowed through the border.

“The government shouldn't be choosing winners and losers in any industry,” said Tim Phillips, president of “The government shouldn't be choosing winners and losers in any industry,” said Tim Phillips, president of

the Koch-backed Americans for Prosperity, one of many groups lobbying against the tariffs.the Koch-backed Americans for Prosperity, one of many groups lobbying against the tariffs.

Trade experts say the national security case for protecting aluminum is stronger than for steel because Trade experts say the national security case for protecting aluminum is stronger than for steel because

aluminum imports are so much higher. Only about 30 percent of steel used in the United States comes from aluminum imports are so much higher. Only about 30 percent of steel used in the United States comes from

overseas, according to the Commerce Department overseas, according to the Commerce Department reportreport..

For now, the White House continues to deliberate and foreign metal continues to travel on ships to U.S. ports For now, the White House continues to deliberate and foreign metal continues to travel on ships to U.S. ports

at record rates.at record rates.

Thursday's postponement extends an already long wait for the domestic industry. Aluminum executives Thursday's postponement extends an already long wait for the domestic industry. Aluminum executives

thought they would get action last summer. The Commerce Department Section 232 reports on steel and thought they would get action last summer. The Commerce Department Section 232 reports on steel and

aluminum — known as Section 232 reports after the national defense exemption of the Trade Expansion Act aluminum — known as Section 232 reports after the national defense exemption of the Trade Expansion Act

of 1962 — were originally expected to of 1962 — were originally expected to come out in Junecome out in June. Instead, they were delivered to the president . Instead, they were delivered to the president in in

JanuaryJanuary..

“Every week Trump waits, another slog of imports are coming in,” said Hillman, the Georgetown professor.“Every week Trump waits, another slog of imports are coming in,” said Hillman, the Georgetown professor.

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thumb_up reply

All I can say is who would this most benefit? Follow the Money!

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jyml617

thumb_up reply

Who gains? Oleg Deripaska perhaps? Check that name against the Paradise Papers. Paul Manafort was no stranger to the Aluminum tycoon.

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froggysaysjump

Now, let me get this straight. john p o'brien