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Zach Mottl: Biden administration must preserve crucial aluminum tariffs

Zach Mottl
| Wednesday, October 6, 2021 2:00 p.m.
Julia Felton | Tribune-Review
U.S. Secretary of Commerce Gina Raimondo tour of Astrobotic’s facility on the North Shore with Pittsburgh Mayor Bill Peduto Sept. 30. She was in Pittsburgh for the inaugural U.S.-EU Trade and Technology Council talks.

U.S. manufacturers have faced a tough time during the covid pandemic. Supply chain disruptions and heavily subsidized import competition have combined to put America’s factories at a disadvantage. It’s critical for Congress and the president to ensure that domestic manufacturing regains its footing. In particular, that means continuing the steel and aluminum tariffs that have helped these two crucial industries compete against global overproduction.

There’s certainly debate about the aluminum tariffs right now. Secretary of State Antony Blinken and Commerce Secretary Gina Raimondo attended the inaugural talks of the U.S.-EU Trade and Technology Council (TTC) in Pittsburgh. And some in the EU are already pushing to ease the aluminum tariffs. However, that would be a serious mistake since these remedies have succeeded in preserving America’s domestic aluminum industry.

My metal products company consumes plenty of primary aluminum in our manufacturing processes. In fact, aluminum is the highest-volume metal we buy. I support the tariffs, and I believe they have been central to saving America’s aluminum production.

In 2018, the Trump administration imposed a 10% tariff on aluminum imports in the face of a global flood of subsidized aluminum. At the time, the U.S. had lost all but five of its primary aluminum smelters, a far cry from the more than 40 smelters in operation only 20 years previously. There was a very real possibility that these five remaining smelters would also go out of business, leaving the nation completely dependent on foreign sources of primary aluminum.

Aluminum is used in various military applications, including fighter jets, naval vessels and ground transportation. It’s also essential to the U.S. power grid, as a cost-effective means for carrying high-voltage electricity. When the tariffs were imposed, the Department of Commerce declared aluminum essential to U.S. national security, and noted that a massive quantity of imports was adversely impacting “national defense and critical industries.”

Since that time, America’s domestic aluminum industry has rebounded. The U.S. now has seven aluminum smelters in operation. And according to Federal Reserve figures, by the start of 2020 U.S. primary aluminum production had increased 48% compared to 2018. All of that despite the covid-driven shutdown of many manufacturing operations that use aluminum. Particularly encouraging is that America’s aluminum sector has added two new smelters, helping to create hundreds of good-paying jobs.

Despite this success, some are now looking to reduce the tariffs — even as overseas producers continue to pile up a glut of aluminum in world markets. Critics have claimed that consumers would see higher prices in their local stores as a result of the tariffs. But those fears proved unfounded. As Century Aluminum CEO Mike Bless reported in August 2020, “There was no harm of any type to any downstream industry. No job losses, no metal shortage, no price inflation.”

Essentially, the tariffs have helped to ease import penetration, something that has benefited America’s economic and national security. But even so, multinational firms are now looking to the U.S.-EU talks as an opportunity to overturn the tariffs.

The Biden administration should ignore these calls — and continue to support domestic aluminum producers. As Blinken and Raimondo travel to Europe, they’ll face calls from European companies seeking tariff exemptions. But granting such exemptions could not only destroy downstream demand for American-made aluminum, but also blunt further investment in manufacturing throughout the aluminum supply chain. In short, Europe must solve its own excess aluminum production issues, not foist them on the United States.

Maintaining strong, enforceable tariffs on both aluminum and steel — and extending these tariffs to imports of other aluminum and steel products — can support continued investment in U.S. manufacturing. The Biden administration must stay the course and continue the tariffs, since they are a proven means to undo the damage caused by decades of unfairly subsidized import competition.

Zach Mottl is chair of the Coalition for a Prosperous America (CPA) and. president of Atlas Tool Works in Lyons, Ill.


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