Sign in | Join us  
      
 Popular Searches:diamond,cbn,tuck point blade,cup wheel,saw blade, brown fused alumina
Home -- Information


  Featured Companies
 • Yantai Cct Metal…
 • Dymend Tools Co.,…
 • Henan Boreas New…
 • Yancheng Xiehe Machinery…
 • EKF Industrial Supplies…
 • Ruishi New Material…
 • MORESUPERHARD
 • Henan Banner New…
 • Zhengzhou best synthetic…
 • Zhengzhou Haixu…

 Print  Add to Favorite
Custom your font size:     

Will Trump Crush China Over Aluminum?


Post Date: 06 Feb 2017    Viewed: 792

Donald Trump and China President Xi Jinping haven’t had a chance to size each other up in the same room yet, but a chat over aluminum beer cans may offer the first opportunity.

Among the last-minute actions President Barack Obama took before leaving was a complaint filed with the World Trade Organization alleging China’s subsidies of its aluminum producers were illegally suppressing global prices of metal and putting American smelters on the verge of bankruptcy. It’s a claim that fits perfectly into Trump’s tough talk on trade and could provide an early window into how he intends to deal with China.

Although aluminum represents less than 1 percent of total exports from China to the U.S., the stakes are high. If China decides to go through the WTO process, it could end up putting the legitimacy of its entire industrial complex on the line. Aluminum is hardly the only industry it subsidizes, and a loss could set an important precedent. “This is the first time there is a systemic challenge to China’s financing and building out of its massive industrial capacity from highly subsidized state-directed financing,” says Alan Price, who leads the international trade practice at Wiley Rein law firm in Washington. “They have a lot to lose beyond the aluminum industry.”

Rather than going through the formal WTO process, which typically takes two to five years and requires costly amounts of research, translation, and analysis, China may choose instead to negotiate with Trump. That would certainly appeal to his style of doing business. It could also save China from additional scrutiny of its aluminum industry, which relies on dirty coal plants for electricity and has an outsize impact on climate change.

China’s aluminum industry has grown tremendously over the past decade. The country is by far the biggest global supplier, producing more than half the world’s aluminum last year. A lot of that is consumed inside China, where aluminum demand has risen 75 percent since 2010. But it’s also led to a glut on the global market. In 2016, the world produced almost 300,000 metric tons of excess aluminum, according to Morgan Stanley. That’s pushed prices down more than 45 percent from an all-time high and threatened the survival of many competitors.

This past summer, Michael Bless, chief executive officer of Chicago-based Century Aluminum, implored the Obama administration to take up a WTO case on subsidies, saying that if nothing was done to cut Chinese capacity, he’d have to close a smelter in Hawesville, Ky., which makes special aluminum used in defense applications. The plant has cut its payroll by more than half in the past two years. “This case specifically is tailor-made for the new president to deliver on his promise to stand up to China and put American workers first,” says Jesse Gary, Century’s general counsel, who helped spearhead the WTO case brought against China.

The Chinese government plans to shut down about 3.3 million tons of aluminum capacity (about 9.5 percent of its total) during the winter to curtail air pollution, a person with knowledge of the matter said in late January. One way to interpret this is that it’s a reaction to the complaint, though it could also end up being a temporary measure if that production comes back on line in the spring.

China could also choose to go through with the WTO process and argue that its aluminum plants are more competitive than those in the rest of the world. Many of its smelters are new and among the most efficient anywhere, unlike their American competitors, which tend to be older and smaller. “China may think: Why should we pay the consequences of uncompetitive assets when we have competitive assets?” says Jorge Vazquez, managing director of Harbor Intelligence, an aluminum research firm in Texas.

China exports virtually no primary aluminum and only about 500,000 tons of the more expensive flat-rolled products to the U.S. Last year it imported more than 1 million tons of aluminum scrap from the U.S. It’s the biggest market for many American scrap companies. If Trump gets too aggressive, China could retaliate and stop buying American scrap.

The WTO aluminum case gives the Trump administration its first chance to show off its negotiating strategy with China and reveal whether it intends to make sector-by-sector adjustments. “It’s a great test case,” says Derek Scissors, an Asia trade analyst at the American Enterprise Institute. “We’re up in the air about whether we’re going to overhaul how the U.S. trades with China or if we’re going to peck at it, and aluminum is a great way to peck at it.”


Superhard Material of China

Superhard Material of China

Abrasives and Grinding Products of China

Abrasives and Grinding Products of China

Coated Abrasives of China

Coated Abrasives of China

Chia International Abrasives & Grinding Exposition

China International Abrasives & Grinding Exposition

Home | About Us | Members | Contact | Advertising Quotation
Supported by Yuanfa Information Technology co.,Ltd
Copyright ©Abrasivesunion 2006. All rights reserved
Page rendered in 0.0244 seconds
增值电信业务经营许可证:豫B2-20202116  ICP备案:豫B2-20100036-2