Donald Trump’s plan for tariffs of 25% on imported steel and 10% on imported aluminum should be a boon to domestic producers, whose output will now be relatively cheaper. The markets have agreed: Share prices of large American aluminum companies rose on last week’s news.
How do US aluminum producers, who stand to win big from the tariff, feel about the president’s move?
Thanks, but no thanks.
In a letter to Trump today (March 6), a group of 114 producers and other companies said they are “deeply concerned” about how a tariff could affect their industry, reports CNBC. They said they believe the tariff will ultimately do more harm than good—especially for US jobs. Among the members are Alcoa, Vulcan, and Rio Tinto Alcan, which together have a US workforce of more than 700,000.
Heidi Brock, president and CEO of the Aluminum Association, shares a common goal with Trump: a thriving US aluminum industry. She’s worried his proposal lets the real culprit off the hook—China.
In its current form, Trump’s proposed 10% tariff on imported aluminum would apply equally to all countries. America imports 90% of the aluminum (paywall) it uses. Canada is the top exporter to the US, followed by Russia.
The authors of the letter believe Trump should target China’s massive aluminum overcapacity, which has flushed the market with cheap materials, instead of penalizing the industry’s North American and European trade partners. As it stands, China is the US’ fourth-largest source for foreign aluminum.
Leaders in the US steel industry may agree. Burke Byer, CEO of Byer Steel, supports a tariff to protect his industry. His company manufactures 40,000 tons of steel each year for Kentucky, Ohio, and Indiana. Yet he’s hoping the final proposal will be more targeted.
“The fortunate thing about this situation is that the president has the ability, within his power, to carve out certain countries and products, which we fully support,” Byers said on CNBC’s Closing Bell. He hopes the president will take into consideration the US relationship with allies like Canada and Mexico.