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American Aluminum Manufacturer Seeks Relief From Tariffs Meant to Help American Aluminum Manufacturers

Alcoa says it needs protection from protectionism. That should be a lesson for the administration.

WADE PAYNE/REUTERS/NewscomWADE PAYNE/REUTERS/NewscomAlcoa, one of the largest American manufacturers of aluminum, is asking the government for relief from tariffs that were supposed to help American aluminum manufacturers.

It turns out that businesses that make aluminum also have to buy things made of aluminum—and those purchases are now more expensive, thanks to Donald Trump's 10 percent tariff on aluminum imports.

Alcoa filed five requests for tariff exemptions with the Commerce Department this week, Bloomberg reports. Three of those requests are for types of aluminum that the company says are not available from American suppliers, and two are for aluminum products that are not produced in sufficient quantity by domestic sources. The Pittsburgh-based company wants exemptions so it can import those products and components from a Canadian subsidiary.

Higher production costs created by tariffs have already forced Alcoa to lower its 2018 profit projections. "The company said in its second-quarter earnings report that it incurred $15 million in costs on material shipped to the U.S.," Bloomberg notes in a separate article.

Alcoa's request for protection from Trump's protectionism reveals one of the critical flaws in the White House's plans to use tariffs to boost domestic production of aluminum (and steel, on which the administration has placed a 25 percent tariff): There simply isn't enough American-made aluminum to satisfy the demands of American aluminum-consuming businesses.

"Even if all the curtailed smelting capacity in the U.S. was back online and producing metal, the United States would still need to import the majority of its aluminum," Tim Reyes, president of Alcoa's aluminum operations, tells The Wall Street Journal.

But the point of the tariffs is to create demand for more domestically produced aluminum, right? Trump has repeatedly claimed that the tariffs are already reinvigorating American steel factories. "Tariffs have had a tremendous positive impact on our Steel Industry," he tweeted this week. "Plants are opening all over the U.S., Steelworkers are working again." Surely the president believes the same will happen for aluminum. If there isn't enough supply, investors will spend to build more aluminum and steel plants here.

Except that's not what's happening.

"In the short term, tariffs are more likely to bring older, relatively inefficient steel plants back online than to stimulate new long-term investments, for the simple reason that the president could withdraw the tariffs at any moment," Soumaya Keynes writes in The Economist.

Trump's unpredictable trade policies are unlikely to give investors the confidence required to build more steel or aluminum plants in the U.S., and expanding production domestically would duplicate operations that are already set up and running in other places. Rather than spending to build more production here, companies like Alcoa are looking for ways to get around the tariffs or will end up having to absorb—and pass along to consumers—those higher costs.

Photo Credit: WADE PAYNE/REUTERS/Newscom

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  • Hugh Akston||

    Alcoa's request for protection from Trump's protectionism reveals one of the critical flaws in the White House's plans to use tariffs to boost domestic production of aluminum

    Where you see a flaw, Trump sees a big company wanting to be his friend so he can do them a favor. Tariffs are working as planned!

  • loveconstitution1789||

    Tariffs are working as planned. Turkey's economy is falling apart, the EU cracked in less than 5 weeks, and the Chinese economy is shuddering.

  • Shirley Knott||

    How, specifically, did the EU crack? By removing tariffs that weren't in place?

  • Hugh Akston||

    They did make vague promises to buy more soybeans, thus vindicating everything Trump has ever done.

  • loveconstitution1789||

    A crack is not a breach.

    Either way protectionists will never admit Trump is doing well or has done great once the EU and China lower their trade restrictions.

  • BestUsedCarSales||

    Are you saying that those who are against the tariffs here are the protectionists?

  • loveconstitution1789||

    90%+ of the people here against Trump's tariffs are perfectly content with managed trade that we had pre-Trump. They are protectionists.

    I do not include the commenters that always advocate free market and want the USA to actually have free market.

  • chemjeff radical individualist||

    90%+ of the people here against Trump's tariffs are perfectly content with managed trade that we had pre-Trump. They are protectionists.

    Who in particular do you believe is a person who opposes Trump's tariffs but who are "perfectly content" with managed trade?

    I see instead a lot of people who oppose Trump tariffs and were not all that content with managed trade deals like NAFTA, but preferred them to the alternative of trade barriers all over the place.

  • loveconstitution1789||

    Lets do a vote.

    -pro free trade 100% somehow
    -want the US to pressure trading partners to get to free trade
    -want the US to pressure trading partners to get to lower trade restrictions
    -fine with pre-Trump managed trade
    -fine with Chinese and EU type trade restrictions
    -fine with drniking beer and smoking weed

    People were content with managed trade that Clinton came up with or Obama. Trump comes along and pushes for free trade via tariff pressure, and the handles come flying off.

  • Calidissident||

    Or maybe people just don't like tariffs and don't buy Trump's pathetic justifications for them?

  • loveconstitution1789||

    There were already tariffs pre-Trump.

    TDS prevents some people from accepting any good reason if it comes from Trump.

  • Huh18?||

    WTF are trying to say? "Trump comes along and pushes free trade via tariff pressure"

    You do know that tariffs are the exact opposite of free trade right?

  • Agammamon||

    The USA can have a free market right now - just end import/export restrictions.

  • loveconstitution1789||

    Thats not free market. Free market involves americans Being able to buy and sell whatever they want to whomever they want.

  • Agammamon||

    They didn't crack. 'They' 'promised' to buy more soybeans. Except that the 'they' here are politicians and they don't buy soybeans and can't compel anyone to do so.

    Turkey's economy is falling apart because they're in the middle of a soft revolution where a dictatorial regime is taking over.

    And the Chinese economy is puttering along just fine. If there's any issues with the Chinese economy its because they've just about eaten up all the low-hanging fruit for efficiency improvements.

  • loveconstitution1789||

    Glad youre sure. The propaganda machines around the world seem worried.

    As long as youre sure, turkey, theEU, and China have nothing to worry about.

  • turco||

    And Turkey's economy falling apart helps us how?
    I'm no fan of Erdogan , but impoverishing other countries does not make us richer.

  • Happy Chandler||

    The US imported $9.9B from Turkey in 2016. We had a $2.5B trade surplus.
    Turkey's GDP was $857B.

  • BestUsedCarSales||

    Was that meant as a response to LC?

  • loveconstitution1789||

    BUCS, Keep up. This thread about to cray-cray.

  • Mcgoo95||

    Dear lc1789, Turkey is our ally, not our enemy, genius. Although, Erdogan is every bit as crazy as Trump and just as reviled by his people.

  • loveconstitution1789||

    Dear mcGoo95, you dont have any idea what you are talking about.

    You comparing Trump and Ergodan makes you look ridiculous.

  • loveconstitution1789||

    Lower trade restrictions. There wont be an Erdogan government to keep trade restrictions up.

    The sooner these authoritarian trading partners (Turkey, EU, China) realize they need the USA more than we need them, the better.

    Lower trade restrictions and this will all be over.

  • Mcgoo95||

    I'm gonna laugh my ass off when all of Trump's dick waving causes a massive market correction, which is long overdue. Then what happens if China doesn't capitulate? Destroying countries like Turkey might be fun for you and your asshole friends, but no good deed goes unpunished.

  • JoeJoetheIdiotCircusBoy||

    but when the market correct occurs, it clearly couldn't have been Trump's fault. As you yourself note, its long overdue. So clearly that isn't Trump's fault, but everyone that came before (and after) him. It can't be Trump's fault. I just don't see how any of the negative things occurring could be Trump's fault. I can definitely see how you Mcgoo suffer from TDS, but that's what I would expect from your standard Reason libtard.

  • loveconstitution1789||

    Market corrections are typically never a presidents fault anyway. All markets correct.

    Presidents should not get credit for economies doing well either.

    We give Trump so much credit because he took off our wrist chains from serfdom that Obama, Booosh, and many other politicians have put on us.

  • Mcgoo95||

    IdiotJoe, a protracted trade war could easily cause a huge market correction. If China doesn't bend over, like lc1789 believes is inevitable, the implications will be large politically and economically. Time will tell. I hope all his dick-waving works....

  • Agammamon||

    It won't. It never has.

    Freer trade has never been the end result of protectionists dick-waving. Its only ever come about when calmer heads have managed to get into power and just walked away from the chimp cage.

  • Agammamon||

    By putting his own chains on us? Thanks Trump.

  • loveconstitution1789||

    You were already in chains.

  • Happy Chandler||

    The tax plan borrowed a ton of money to increase corporate earnings compared to previous baseline. Then, they increased spending. Increased spending is just a deferred tax hike.

    Since borrowed money was funneled to the stock market, it went up. Wages are growing less than inflation. Plus, health care rates are going up and consumers are paying for tariffs. So the working man is poorer and owes future debts.

  • loveconstitution1789||

    Tax breaks are not borrowed money.

  • Echospinner||

    Trump found a weapon he can use at will. It is another shift to autocratic rule.

    Economic argument does not work because these tarrifs and trade wars are not about economics. They are not about helping American business. The sole purpose is consolidation of power. The way a strongman achieves more power is to create enemies and crises. Then convince the people that only he can see us through the crisis.

    Listen to his supporters. They are buying it hook, line, and sinker. Trump excels at propaganda and manipulation of people's fears. At least he is keeping us safe from murderers and rapists, right fellas?

  • loveconstitution1789||

    Sorry you think that way. Your opinion exposes that fantasy that you people live in.

    I hope you wake up but you probably had decades of brainwashing.

    Autocrats seize power and use that power to further their goals. Trump uses American power to further Americans goals. You might not agree with how he does it or why, but Trump is clearly not an autocrat.

  • Agammamon||

    Trump uses American power to further Americans goals.

    There you go collectivizing everyone again. Best you can say is that right now Trump is going to shove shit down your throat whether you like it or not because *he* thinks its in your best interest.

    He's still a violent autocrat and is still consolidating as much power as he can in order to keep doing this.

  • Mcgoo95||

    ^this

  • loveconstitution1789||

    Maga!

  • Lost in the Woods||

    In what way, in your opinion, is he 'violent'? Annoying perhaps. Definitely entertaining. Possibly insane. Perhaps even effective. Time will tell. But violent? No more so and probably less so than previous presidents, it seems to me.

  • The_Hoser||

    He's because WORDS HURT, man! Haven't they violently shoved that down your throat yet?

  • Lost in the Woods||

    Well yes, if tweets count as violence then I concede the point.

  • chemjeff radical individualist||

    Wait, I thought the goal was free trade, not trying to destroy the economies of our competitors.

    You mean what Trump really wants is to exert American mercantilist economic dominance?

  • loveconstitution1789||

    The Trump plan is to pressure trading partners into lowering their trade restrictions.

    These countries choose to increase trade restrictions and bankrupt themselves. Trump is not forcing any other country to raise trade restrictions.

    These countries think their economies are like the USA and they will learn quickly that they are not.

  • loveconstitution1789||

    You really need to read slower, Chemjeff. It will help with your reading comprehension.

  • Mcgoo95||

    And what happens when China decides it would just rather beat Trump as his game, to both of our loss? Then we all lose asshole.

  • Happy Chandler||

    China will do a photo op and vague promises.
    Trump will declare victory.
    Nothing will change. At best, a token gesture.

    See:
    EU Tariff deal
    North Korea nuke deal.

  • loveconstitution1789||

    Maybe, maybe not.

    Its more likely China will flinch first. Worst case, we go to war with China and void our Trillions in debt with them.

    Win-win-win.

  • Mcgoo95||

    "Its more likely China will flinch first. Worst case, we go to war with China and void our Trillions in debt with them."

    Seroiusly? War? Over what.... fucking soybeans? You aren't even a useful idiot.

  • chemjeff radical individualist||

    LC1789 doesn't want free trade. He wants American mercantilism. He doesn't want America to be an equal trading partner with the likes of China. He wants America to dictate terms to China on when, whether and how they deign to trade with us.

  • Mcgoo95||

    Exactly....or he advocates war, like a good little mercantilist. At least it's nice to know he's not only racist against black people......I guess.

  • loveconstitution1789||

    Chemjeff cannot read when I say that I want free trade. Zero trade restrictions for the USA and our trading partners.

  • Happy Chandler||

    How would we void debt with them? Cancel treasury bonds?

    You do realize that the trade deficit is not related to debt, right? Right?

    Oh...you listen to Trump.

  • loveconstitution1789||

    The national debt dum-dum. China holds trillions in treasury securities.

  • Happy Chandler||

    What did I say? Cancel treasury bonds. I know what the national debt is.

    Cancelling treasuries is the most insane proposal.

  • loveconstitution1789||

    You clearly dont know what the national debt is made up of.

    Cancelling treasuries for china that we could be at war with is an expected strategy. Why would you give money to someone who wants to fight you? You dont.

  • No Yards Penalty||

    ferchrissakes, take Trump's cock out of your ass, lovecontard1789.
    You're such a fucking retard on economics. Go play at the Federalist with the other Trumpanzees.

  • loveconstitution1789||

    Oh troll, pull hillarys dick out of your mouth.

  • loveconstitution1789||

    Alcoa, one of the largest American manufacturers of aluminum, is asking the government for relief from tariffs that were supposed to help American aluminum manufacturers.

    Tariffs are not supposed to 'help' American manufacturers. Trump's tariffs are being used to pressure our trading partners to lower their trade restrictions.

    Boehm, you have been covering this for months now and you cannot even get that right?

  • BestUsedCarSales||

    What's the perceived benefit here then?

  • Shirley Knott||

    A policy with no track record of success.
    Or would you care to cough up a cite for once?

    It's cute that you can claim to know better than Trump does regarding his own intentions. He's been very clear, and his story is not yours.

  • loveconstitution1789||

    The EU cracked in less than 5 weeks.

  • Tony||

    Also, he's not ruining steak by putting ketchup on it, he's inventing a whole new branch of gastronomy. And just as Voltaire said, only morons need words with more than 2 syllables.

  • turco||

    " Trump's tariffs are being used to pressure our trading partners to lower their trade restrictions."

    If that is true, then they are illegal. The President has authority to raise tariffs for national security reasons, not for economic reasons. The whole legal justification was to produce Aluminum and Steel for warplanes and warships in case of war.

  • loveconstitution1789||

    *Trading With the Enemy Act of 1917, the president can impose a tariff during a time of war. But the country doesn't need to be at war with a specific country — just generally somewhere where the tariffs would apply. (This is how Richard Nixon imposed a 10 percent tariff in 1971, citing the Korean War.)
    *The Trade Act of 1974 allows the president to implement a 15 percent tariff for 150 days if there is "an adverse impact on national security from imports." After 150 days, the trade policy would need congressional approval.
    * International Emergency Economic Powers Act of 1977, which would allow the president to implement tariffs during a national emergency.

    Trump's White House cited Section 232 of the Trade Expansion Act of 1962, a provision that gives the secretary of commerce the authority to investigate and determine the impacts of any import on the national security of the United States — and the president the power to adjust tariffs accordingly.

    This is a win win win for Trump. Congress can end the tariffs by banning tariffs- a future president could not use a pen and phone either. Trump gets trading partners to cave and lower trade restrictions.

  • Mcgoo95||

    So everything you just cited basically says that what Trump is doing is not really even legal. What was your point again?

  • Mcgoo95||

    Actually now I might understand how your warped brain is working. What your saying is that because the president is *probably* illegal waging trade war with tarrifs, the only recourse is for congress to ban tarrifs wholesell and thus prevent future presidents from waving their dick around like him? That is really the only course of action you think is available to remaing two branches of government? Was that the point?

  • Happy Chandler||

    Congress gave the President authority on the assumption that the President would act according to law.
    The Supreme Court gives latitude to the President to on the assumption that the President acts in the best interest of the country.

    Trump purposefully damages the country to prove that it's not a good idea.

  • loveconstitution1789||

    Congress can remove the president authority at any time.

    Any Republican who does, ends their political career.

  • Mcgoo95||

    If China doesn't roll over and people start feeling the effects, you can be sure the Republicans will end this foolishness. Many of them are against it already.

  • loveconstitution1789||

    Says the lefty media that had Hillary as a shoe-in.

  • Dizzle||

    You need to google what's going on currently in chinas economy. It isn't pretty for them.

  • Mcgoo95||

    Here you go P-dizzle,

    http://lmgtfy.com/?q=chinese+yuan+to+USD

    The yuan is about at the same level it was in 2017. Nice try.

  • loveconstitution1789||

    Chinese manipulating currency is not the same thing as a strong economy.

  • Calidissident||

    So you're ok with the president blatantly violating the law by falsely justifying tariffs in the name of national security when by your own argument it's actually about pressuring countries into better deals?

  • chemjeff radical individualist||

    "It's okay when Trump does it because _____________"
    (fill in the blank as appropriate)

  • loveconstitution1789||

    "Its bad when Trump does it because ___________ ".
    (fill in the blank as appropriate)

  • Happy Chandler||

    It's against the law?

    Yeah, that's bad.

  • loveconstitution1789||

    What is?

  • Happy Chandler||

    National security tariffs for economic reasons, dum dum.

  • loveconstitution1789||

    Oh dum-dum, since you cant read the President can institute tariffs for numerous reasons.

  • perlchpr||

    MAGA HARDER!

  • Jerryskids||

    #Whining!

  • Diane Reynolds (Paul.)||

    I'm wondering if the unintended consequences of Trump's policies will cause the body politic to review the century or so of unintended consequences of previous economic policies?

  • Jima||

    Based on the "body politic's" past track record, I'm going to bet on No. A century of bad results is just a coincidence...

  • Jerryskids||

  • Scarecrow Repair & Chippering||

    Yes, but.

    We must idolize someone who tramples individual rights, injects uncertainty into every economy on the planet, raises prices, add inefficiency, raises taxes in addition to tariffs because someone's got to pay the cronies he's helping who got thrown out of work because consumers don't buy as much product when prices are jacked up, and ...

    wait, what was the benefit of all this? Oh that's right, in exchange for him mangling rights and economies, some idiots actually think the end game is no tariffs at all, and justify all thsi wrecking by the faint hope of a politician actually following through, and the even fainter hope that all other politicians around the world will listen to our politician more than all their own cronies, who, not to spoil anyboyd's dreams, are the only ones who can actually reward those foreign politicians for doing what they want, and are likely to disreward any politician who ignores them in favor of a foreign politician.

    Got it. 17 dimensional sudoku.

  • chemjeff radical individualist||

    I don't think Trump wants free trade. I think what he wants is to be able to go to a rally and tell the adoring crowd "We got China to cave to the US! We're winning the trade war!" He wants to WIN. It's as simple as that really.

  • loveconstitution1789||

    I guess Obama? Am I right?

  • The_Hoser||

    If you like your tariffs, you can keep your tariffs!

  • Lost in the Woods||

    If I understand Trump's argument, and that of his supporters, it is "1.) our relationship with our trading partners is not 'even' or 'level' - they impose higher tariffs or other restrictions than we do, China steals intellectual property, etc., 2.) we have tried the strategy of playing nice and working gradually towards a more free trade environment, 3.) that strategy hasn't worked, and therefore 4.) we must be more aggressive and maybe playing hardball with our own tariffs, etc. will bring some positive change, keeping in mind that 5.) the ultimate goal remains freer trade." Clearly we run massive trade deficits with other countries, and have for decades. What isn't clear to me is whether the web of complicated trade agreements really puts us at a disadvantage. But if we are at a disadvantage, why not try a different approach? That is one thing (and it hurts me a bit to say this) that I like about Trump - taking a new approach. But the question remains whether the end game is really freer trade or just a different set of complicated trade agreements. I will admit I have no clue what his real objectives are.

  • loveconstitution1789||

    You sum it up okay.

    Trump offered free trade if our trading partners ended trade restrictions. They refused. Trump thinks pressuriing china and the EU, will get them to reduce trade restrictions. I give him until June 2019 to try or go back to June 2018 trade restriction levels.

    Free trade would be great the USA in the long run after an adjustment to lower foreign labor costs.

    Trump is just trying to get lower trade restrictions than June 2018.

  • Happy Chandler||

    Trump is saying that the other countries tax their consumers too much, so he's going to tax our consumers more.

  • Happy Chandler||

    Trump is either confused or disingenuous about what a trade deficit means. It means the US gets more stuff than it sells. That's a good thing! We like having stuff! If it gets too high, the exchange rate will adjust and well sell a bit more and buy a bit less. Nothing wrong there!

  • loveconstitution1789||

    Maga

  • No Yards Penalty||

    Can anyone tell me when LoveContard1789 started infecting these threads with his Trumpanzee drivel?
    Jeezus, I remember when Old Mexican or New Mexican or whatever version of the Mexican would comment on economic threads and we'd actually learn something that advanced libertarianism and or Austrian economics.
    Fucking Trumpanzees are economic retards. They make us all stupider for having read their drivel.

  • Echospinner||

    If one us libertarians went on a lefty or righty website and started talking libertarian, people there would say the same thing. If you have been there you know what I am talking about. Most people think we are crackpots. I probably am anyway so fine with me.

    Ok so he thinks that all this is to achieve the goal of zero tarrifs for everyone so it is just temporary pain. Everyone else sees that as bunk. The only thing is having said that there is no need to keep repeating the same argument over and over. It doesn't convince anyone.

  • loveconstitution1789||

    Poor yards, gets upset when us Libertarians discuss how well Trump is doing to further Libertarian-ish goals.

  • Mcgoo95||

    Except you're a republican pushing mercantilist goals...

  • loveconstitution1789||

    You mispelled 'free market goals'.

  • Echospinner||

    Things are getting messy out there it seems.

    Turkish lira melting. Russia moving away from US assets. China is not backing down. EU not backing up Iran sanctions.

    I don't know the significance of all this but it does not look good. Was thinking of some changes in my retirement account. Maybe best to wait. Looks like a drop coming.

  • Mcgoo95||

    I sold everything Friday...time to sit on cash and watch the show.

  • Echospinner||

    Trust and confidence. It all really comes to that.

    Not just the markets, every human interaction.

    Trump is destroying trust and confidence in the United States of America.

    Both from within and without.

  • loveconstitution1789||

    The market gets stronger every day. I buy buy buy. As all the suckers who didnt buy more stock found out during 2017, Trump is great for the US economy.

    Booms always have market adjustments. The boom is not over yet.

  • Mcgoo95||

    Are you payed by Trump to pump out this drivel?

  • Eman||

    I think it's obvious we just need to tariff harder.

  • VinniUSMC||

    Faux outrage over "Tariffs are just a tax on citizens"... where's the outrage over actual taxes on citizens?

  • gad-fly||

    Now Alcoa wants to have its cake and it it too. They want to fire up their Canadian subsidiary to produce what they don't make in the U.S.

    Meanwhile back at the ranch, plastic and glass containers will retire aluminum for the food business and plastic content in automobiles likely will increase. Perhaps it is time to dig up some old landfills for buried glass and plastic to be recycled. When one commodity goes up in price for whatever reason, recycled goods often become the best value. Next we could possibly see our brilliant president placing tariffs on imported trash.

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