President Trump took another step to revive U.S. manufacturing, and protect national security, by greenlighting an investigation into aluminum imports.
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Speaking at the White House, Trump surrounded by a group of aluminum executives from companies such as Alcoa (NYSE:AA), noted the U.S. now produces less of the industrial metal than it did in 1952.
He is now tasking Commerce Secretary Wilbur Ross, who has added aluminum to his hit list, to investigate potential bad actors importing the industrial metal.
|CENX||CENTURY ALUMINUM CO.||3.04||-0.27||-8.16%|
“Imports have been flooding in to the aluminum industry,” said Ross, during a briefing with reporters, confirming the basis for an investigation that began on April 26. He also cautioned that a class of the high-quality silver metal is used in several defense jets including Lockheed Martin’s (NYSE:LMT) F-35, and Boeing’s F-18 and C-17 (NYSE:BA). It is also used in armor plating of military vehicles and combat vessels.
The investigation is ongoing and has not reached a conclusion, he said.
Ross noted that there is just one U.S. smelter plant that can produce high-quality aluminum for the defense industry. “It is very, very dangerous to have one [high-quality] supplier of critical material” he noted.
Along with national security concerns, Ross said imports have, in part, crippled the U.S. aluminum industry which has seen at least eight smelter plants either close or dial back production since 2015. The secretary also called out China’s rising dominance of global aluminum market share. Canada, Russia and the United Arab Emirates are also big suppliers to the U.S.
Mining giant Rio Tinto, which is one of several companies that imports aluminum to the U.S., is open to a review of practices and contends the U.S. and Canada have a solid working relationship. “We are confident that the national security review of aluminum imports will recognize the exceptional role that cost-competitive, high quality and readily available aluminum from Canada plays as a key input for U.S. manufacturers – including in the defense sector,” a spokesperson tells FOX Business.
Earlier this week Ross lowered the boom on Canada in an attempt to level the playing field on lumber and dairy trade.
“The way it works in Canada is that the provinces own the standing timber and they charge very, very low, way below market fees for what’s called stumpage, mainly the right to cut the trees down," Ross told the FOX Business Network's Lou Dobbs on Tuesday. "That in turn lets the Canadians ship lumber into the U.S. at a subsidized price.”
Now, the U.S. wants payback.
“The preliminary finding was a fine of $1 billion per year, and since we are imposing it retroactively for 90 days, when we put them on notice that will be an extra one-time $250 million and they began paying those fines today,” said Ross.
Ross is also investigating all foreign steel imports, a promise he made after being confirmed, as reported by FOX Business. The Commerce Department is conducting these steel and aluminum probes – also known as 232 investigations - by dusting off a rarely used portion of an old trade law.
When asked about the connection to these recent trade crackdowns and the future of NAFTA he said, “This is about aluminum, not NAFTA.”
Suzanne O’Halloran is Managing Editor of FOXBusiness.com and a graduate of Boston College. Follow her on @suzohalloran.A.”