Trump's tariffs are paying off for Century Aluminum
Thursday, August 23, 2018
According to an article in the New York Times, President Trump's 10% aluminum tariffs that have rattled global businesses, set off retaliatory levies and started eating into profits of some major American companies, are a boon to Century Aluminum. The company held a ceremonial hoopla around the restart of its Hawesville, KY smelter this week. Century is planning to invest over $150 million to more than double output at the plant, and add 275 jobs in the process.
Century’s victory is no accident. For years, the company lobbied the United States government to take action to protect the aluminum industry, advocating tariffs and other trade barriers to stop imports of cheap metal from China.
According to the Commerce Department, the United States accounts for just 1 percent of global aluminum output and imports accounted for 90 percent of the aluminum market in the United States last year. China produces 49 times more aluminum than the United States, where only six smelters remain.
The Aluminum Association opposed Mr. Trump’s across-the-board tariffs because, while they benefit primary domestic producers like Century, they are raising costs further down the aluminum supply chain.
Even Alcoa, the other big aluminum producer in the country, opposed the tariffs. The company, which imports much of its aluminum from facilities in Canada, is being hit by the new duties and has asked the Commerce Department for an exemption so it can avoid the 10 percent tax. Last month, Alcoa said that the tariffs could cost the company $100 million this year.
Most of the aluminum sector’s jobs are secondary markets, and it is unclear how they will handle the higher prices once they are passed on. Potentially, more jobs in the aluminum market could be lost than gained by Mr. Trump’s tariffs.