Arizona's manufacturing companies are facing a serious challengean onslaught of unfairly traded aluminum imports that threaten American jobs. As president of MI Metals, an aluminum extruder in Prescott Valley, I see firsthand the resilience and ingenuity of U.S. industry. But it is impossible to compete with foreign importers that don’t play by the rules.
Extruded aluminum is everywhere, from window and door frames to aerospace equipment. It also is crucial in the transition to a green economy, a cornerstone of sustainable development. Yet despite the product’s ubiquity and growing demand, the U.S. extruded aluminum industry is endangered. Fourteen countries led by China are flooding the U.S. with dumped and subsidized aluminum extrusions, wreaking havoc on a $7 billion industry.
China's constrained economic growth, triggered in part by a collapse in a real estate sector reliant on aluminum extrusions, lies at the heart of this chaos. China’s economic downturn has led to persistent overproduction and the export of surplus supply. This means that producers in third countries like Malaysia, Vietnam, Taiwan, Ecuador, and Colombia are being pushed out of their own markets and turning to the U.S. to dump their extrusions. The surge in cut-rate imports has intensified in recent years, posing a significant threat to U.S. producers.
Aluminum extruders in the U.S. directly employ 37,000 workers, many union members, and indirectly employ another 160,000 people. Those jobs, including many here in Arizona, are in jeopardy as the onslaught of unfairly traded imports continues.
The situation is dire. At MI Metals, we have experienced a major downturn in sales and have been forced to reduce our workforce and curtail production even as domestic demand is increasing.
Aluminum extrusions are formed the same way regardless of where they are manufactured. Heated aluminum alloy is pushed through a steel die to form almost any shape you can imagine. Its strength, light weight, and resilience are big selling points.
Unfortunately, 2024 is not the first time the industry has been forced to grapple with illegally underpriced imports. In 2010, we confronted a similar torrent of unfairly traded aluminum extrusions, prompting extruders to seek assistance from the federal government. Tariffs were imposed on Chinese imports the following year. Unfortunately, this action, coupled with China’s economic downturn, merely redirected Chinese extrusions to other global markets, including those in Ecuador, Indonesia, Taiwan, and the United Arab Emirates, which then turned their focus to the U.S. market.
Chinese producers also have established operations in third countries to continue their assault on the U.S. For instance, between 2020 and 2022, U.S. imports of aluminum extrusions from Mexico surged by more than 80%, with a large portion originating from Chinese-owned companies.
The situation is, incredibly, about to go from bad to worse. Chinese companies are scrambling to expand their manufacturing capacity in Mexico. In a major escalation, the Xeusheng Group of China plans to establish a plant in Coahuila, Mexico, equipped with six extrusion press lines.
The industry will not sit by and watch as American businesses suffer due to unfair practices. Last year, a coalition of 14 U.S. aluminum extruders, along with the United Steelworkers union, urged the U.S. Department of Commerce and the International Trade Commission to implement measures to combat dumping and subsidies.
The Commission's initial decision to proceed with investigations is a positive step. The coalition, of which I am a member, is actively pressing the Commerce Department to assess the full scope of dumping and subsidization by extruders in the 14 countries involved. The Commerce Department also made some affirmative preliminary determinations and calculated initial duty margins for these imports of up to a staggering 377%. These decisions were largely positive, but it is vital that they be increased for many foreign companies in the final determination expected later this year.
On a level playing field, American extruders cannot be beaten. But this can be realized only when foreign countries adhere to fair trade practices, refraining from undercutting American manufacturers through dumping and subsidies. The U.S. government must intervene to safeguard American jobs and ensure a fair marketplace for all.
Brook Massey is the President of MI Metals, Inc. of Prescott Valley.
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