Local U.S. lawmakers sent a letter to President Trump on Friday describing the pending closure of the Alcoa aluminum smelter near Ferndale as a failure of his trade war with China and calling for a harder line on curbing that nation’s overproduction.
“We have a shared interest in addressing unfair trading practices and protecting American jobs in the domestic aluminum industry, but it is clear that your current policies are not working,” the letter says. It’s signed by Democratic Sens. Patty Murray and Maria Cantwell and Reps. Suzan DelBene and Rick Larsen.
Pittsburgh-based Alcoa announced last week it will curtail production at the Intalco Works plant by July, throwing 700 people out of work. The plant, just outside the Whatcom County town of 14,500, has operated there since 1966. Alcoa blamed global overproduction of aluminum and declining demand for the commodity amid the coronavirus crisis.
“It’s clearer than ever that President Trump got us into a trade war and the United States is not winning,” DelBene, D-Medina, whose district encompasses Ferndale, said in a release. “This will have a devastating and lasting harm to the Ferndale community but they are far from alone in feeling this pain. It’s incumbent on the president to finally take responsibility and focus on effectively dealing with subsidized aluminum excess capacity in China.”
The letter states Trump has been too soft on “predatory trade practices” by China and needed to do more to target that nation and “other bad actors” in aluminum overproduction without damaging vital relationships with trade allies.
In March 2018, citing “national security” reasons, Trump imposed a 10% tariff on most foreign aluminum and 25% on steel. Trump argued the move was to protect American companies, but critics slammed the decision, calling it punitive to U.S. allies in Western Europe and Japan while doing little to China other than provoke retaliatory tariffs that hurt domestic companies.
Economists also predicted the tariffs would drive up costs of downstream products made from steel and aluminum — particularly in the automotive, construction and appliance industries — and necessitate further tariffs. That’s what happened in February as Trump expanded the tariffs to include metal items like nails, tacks, cables, wires and bumpers and other parts used for cars and tractors.
The letter sent Friday also takes aim at the Department of Commerce’s “broken” exclusion process for domestic companies seeking to avoid tariffs for imports of certain aluminum products. Published reports have stated the department was approving one out of every two exclusion requests.
“It is clearly appropriate to grant some companies, especially small businesses, exclusions if necessary,” the letter states. “However, it is troubling that the Department of Commerce granted exclusions at volumes that vastly exceed current import levels.”
The letter says Trump missed an opportunity during its “phase one” deal with China in January to address the issue of aluminum overcapacity or secure commitments that the regime there would take meaningful steps to curb its state-owned enterprises. That deal, a partial trade-war truce, saw Trump ease some tariffs while China agreed to increase purchases of U.S. products by 50% from 2017 levels and provide further protections for intellectual property of American companies.
But the letter sent Friday, while applauding some of the gains as “a step in the right direction,” expressed concern it could strengthen state-owned Chinese companies overproducing aluminum.
It says the Trump administration must work more closely with U.S. allies to combat Chinese trade practices.
“We may have areas of disagreement with our allies on some trade issues, but this is one area where working together has always had the potential to have an important impact,” the letter concludes.