World Economy

China Overproduction Threatening US Aluminum Firms

China Overproduction Threatening US Aluminum FirmsChina Overproduction Threatening US Aluminum Firms

Chinese overproduction is sending the US aluminum industry into near collapse, endangering supplies of materials critical to American defense and national security, manufacturers told a public hearing on Thursday.

However, several industry representatives cautioned against imposing tariffs on Canadian exports, saying production in that country was closely intertwined with the US industry, AFP reported.

As part of an aggressive stance on trade matters, the Trump administration has announced investigations into whether unfair trade practices are undermining industries that produce supplies of steel and aluminum critical for US military and defense applications.

Chinese authorities say their industry is competitive and focused on meeting domestic demand and that they are studying US actions to assess any impact they may have on Chinese industry.

Aluminum is an important element in aircraft such as the F/A-18 Hornet and F-35 fighter jets, navy and coast guard vessels as well as army and marine corps tactical vehicles, industry representatives said Thursday at the commerce department’s administrative hearing.

They called for tariffs on Chinese imports in particular, saying unfair state subsidies in that country were responsible for the current global supply glut.

Michael Bless, president and chief executive of the Century Aluminum Company, which operates smelters in Kentucky and South Carolina, said his Chinese competitors were inefficient but propped up by the Chinese government.

“Market principles simply do not apply in China,” Bless told the hearing. “They lose money yet continue to expand.”

Representatives of Alcoa, Kaiser Aluminum and United Aluminum also argued that unfair Chinese competition was a threat to their industry and domestic security.

Robert Scott, an economist at the left-leaning Economic Policy Institute, said US capacity was in free fall due to Chinese competition. Scott told the hearing that capacity in that country rose 1,500% since the year 2000, accounting for 82% of the global increase in production. In the same period, 18 of 23 US smelters closed, taking 13,000 American jobs with them.

“If current trends persist, in time of war or other national emergency, the US would find itself dependent on unstable import supplies,” said Scott.


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