U.S. Aluminum Manufacturing: National Security and Tariffs
link to page 1 
March 11, 2021
U.S. Aluminum Manufacturing: National Security and Tariffs
Aluminum—a lightweight, ductile, malleable, and
Russia, Canada, and the United Arab Emirates, ranked in
corrosion-resistant metal—is increasingly used in many
order. The United States was ninth.
industrial and technological applications, including in
At year-end 2020, three companies—Alcoa, Century
products used for national defense and lower emission
Aluminum, and Magnitude 7 Metals—operated six primary
vehicles. In Congress, views on the aluminum industry
aluminum smelters in the United States, compared to five
generally diverge between those who support policies to
companies operating nine primary smelters domestically in
increase domestic production for national security and
2010. Primary smelters operated at about 49% capacity in
economic reasons and others who argue that such policies
2020, down from 60% in 2019. U.S. secondary aluminum
may raise aluminum prices and harm aluminum-consuming
production was 3.2 million metric tons in 2020, over three
sectors (e.g., transportation equipment, containers and
times U.S. primary aluminum production. China was the
packaging, and construction).
world’s largest producer of secondary aluminum in 2019,
Domestic Aluminum Manufacturing
followed by the United States and Japan.
Aluminum is manufactured through two distinct processes
Factors Affecting U.S. Production
(see Figure 1). Primary aluminum production consists of
In addition to imports and global overcapacity, high
mining bauxite, refining it to produce alumina, then
domestic costs depress U.S. production of primary
smelting it to yield aluminum. Secondary aluminum derives
aluminum. Comparatively high electricity costs in the
from recycled scrap metal. Sources of the scrap are (1) old
United States, where electricity can account for up to 40%
scrap, recovered from finished products such as used
of the cost of primary aluminum production, encourages
aluminum cans, auto parts, and aircraft; and (2) new scrap,
firms to locate smelters in countries such as Canada and
material left over from processing aluminum into consumer
Iceland with lower electricity costs. Exchange rates and
or industrial products.
labor costs may also adversely affect U.S. smelter
Figure 1. Aluminum Sources and Uses
production.
U.S. primary smelters also use older, less energy-efficient
technologies than newer plants in the Middle East and Asia.
The newest U.S. primary smelter opened in 1980. Primary
smelting also involves large capital investments: a new
smelter may represent at least a $2 billion investment. In
recent years, several U.S. primary aluminum production
facilities have reduced production or closed partly due to
industry consolidation. CRS is not aware of any aluminum
Source: Figure adapted by CRS from NERA Economic Consulting,
producers having announced plans to build new primary
Impacts of Potential Aluminum Tariffs on the U.S. Economy, June 2017.
smelters in the United States.
Production of secondary aluminum is usually more
Secondary aluminum can be substituted for primary
economically attractive, as the capital cost of a secondary
aluminum in most uses; however, primary aluminum is
smelter is much lower than for a primary aluminum smelter.
favored in applications with high quality and consistency
The Energy Information Administration estimates
requirements, such as electronics and aerospace
secondary smelters use 6% of the energy required by
manufacturing. A few smelters worldwide produce primary
primary smelters. One company reportedly plans to build a
aluminum of sufficient purity for use in military aircraft, as
new rolling mill in the United States for secondary
well as in lightweight armor plating found in many defense
aluminum.
ground and weapon systems. According to the Department
U.S. Demand for Aluminum Products
of Defense (DOD), military requirements for aluminum
represent about 3% of total U.S. consumption of aluminum.
The economic downturn in 2020 caused by the COVID-19
In 2020, U.S. production of primary aluminum totaled 1.0
pandemic contributed to shut downs or reduced production
million metric tons, reports the U.S. Geological Survey
at the facilities of U.S. aluminum-consuming industries,
(USGS), well below peak domestic production of 4.7
reducing U.S. consumption of aluminum to 2.9 million
million metric tons in 1980. The United States was the
metric tons, down 41% from 2018, according to USGS.
world’s top producer through 2000. By 2020, the United
Likewise, imports of primary aluminum shrank to 3.2
States accounted for 1.5% of the world’s primary aluminum
million metric tons in 2020, a drop of 42% from 2018.
production. Global overcapacity, driven by certain foreign
More than two-thirds of U.S. primary aluminum imports in
government subsidies—particularly by China—has reduced
2020 were from Canada, where Alcoa operates three
the global price of aluminum. After China, the world’s
primary aluminum smelters, followed by the United Arab
largest producers of primary aluminum in 2020 were India,
Emirates, Argentina, and Russia. The United States imports
https://crsreports.congress.gov
link to page 2 link to page 2 U.S. Aluminum Manufacturing: National Security and Tariffs
a small amount of secondary aluminum, a total of 530,000
smelter by capacity. The company has said it may be forced
metric tons in 2020.
to shutter its smelter if the tariffs are removed.
China, which became the world’s largest primary aluminum
Alcoa, the largest domestic producer with substantial
producer in 2002, accounted for more than half the world’s
overseas production, opposes the tariff, and has not
production in 2020, but does not export it in commodity
restarted any domestic capacity and has curtailed its smelter
form to the United States. Instead, China ships to the United
in Washington. The Aluminum Association, the industry’s
States semi-fabricated aluminum products, such as bars,
broadest trade group representing Alcoa, as well as
rods, and wire, which are subject to U.S. trade actions.
aluminum recyclers, fabricators, and industry suppliers,
Aluminum Industry Jobs and Wages
opposes the U.S. tariff on aluminum imports. It has asked
for a global forum to discuss aluminum excess capacity,
U.S. aluminum manufacturing employed an annual average
subsidies by China, and a U.S.-Chinese negotiated
of 60,585 workers in 2019, according to the Bureau of
agreement.
Labor Statistics (BLS). Of these, jobs in primary and
secondary aluminum production numbered 14,224; BLS
Companies can petition the Commerce Department to
preliminary data show employment at 13,217 in June 2020.
exclude specific imported aluminum products from the
The remaining jobs are at facilities that make rolled or
Section 232 tariffs. As of February 7, 2021, Commerce has
extruded products from primary or secondary aluminum.
received 27,571 product exclusion requests, including from
Alcoa; the agency has granted about 60% of the requests.
Primary aluminum workers earned an average wage of
Some U.S. firms have testified before Congress that the
$81,522 in 2019, higher than the average wage of $69,920
exclusion process is burdensome, opaque, and costly.
for all U.S. manufacturing workers. The secondary
Commerce is implementing some changes to the process
aluminum sector paid an average wage of $63,328 in 2019.
and a monitoring system requiring importers to share data,
Though the 10% tariff imposed by the Trump
such as the country where aluminum used in the
Administration on certain aluminum products (see “Trump
manufacture of the imported product was smelted and
Administration Actions” below) may have been a factor in
poured.
sustaining some jobs domestically in aluminum
The United States-Mexico-Canada Agreement (USMCA),
manufacturing in 2018 and 2019, preliminary data show the
in effect since July 1, 2020, requires 70% North American
combined number of jobs in primary and secondary
aluminum content for auto parts and vehicles to qualify for
aluminum manufacturing shrank 9% in June 2020 from
tariff-free trade. This may increase demand for North
June 2019. This is attributable, in part, to a decision by
American aluminum over time as the average vehicle
Alcoa in April 2020, to fully curtail “uncompetitive
smelting capacity”
gradually uses more aluminum to meet USMCA rules of
at its aluminum smelter in Washington,
origin requirements.
citing “declining market conditions.”
Trump Administration Actions
Other Congressional Considerations
In 2020, some Members sought to add aluminum and
To address the national security implications of aluminum
aluminum alloys to DOD’s specialty-metals provision (10
imports, in March 2018, the Trump Administration imposed
U.S.C. §2533b) and to apply to DOD and the Department
a 10% tariff, or in some cases a quota, on U.S. imports of
of Transportation a domestic sourcing mandate. Neither
certain aluminum products from almost all countries, and in
provision was included in the FY2021 National Defense
January 2020, expanded the tariff to certain derivative
Authorization Act (NDAA; P.L. 116-283).
aluminum products. The tariffs and quotas were applied
under Section 232 of the Trade Expansion Act (19 U.S.C.
Some Members have expressed concern that insufficient
§1862, as amended), which allows a President to restrict
domestic production of primary aluminum could pose a
imports if the Department of Commerce (Commerce) finds
grave risk in a national security crisis. These Members have
they threaten or impair U.S. national security. The Biden
advocated for the President to employ Title III of the
Administration has not announced plans to remove or
Defense Production Act (DPA; 50 U.S.C. §4533) to offer
amend the tariffs.
U.S. aluminum producers economic incentives, such as loan
According to Commerce’s Section 232 report on aluminum,
guarantees or purchase commitments. The FY2021 NDAA
requires the Secretary of Defense to submit a report to
a primary aim of the Trump Administration’s 10% tariff
Congress, due not later than March 1, 2022, on how the
was to raise the price of imported aluminum to encourage
DPA could be used to increase domestic aluminum
domestic manufacturers to restart idled capacity. USGS
refining, processing, and manufacturing.
figures show that from January to November 2020, the
average price of primary aluminum in the United States
Past Congresses have considered legislation to override the
registered at $1,944 per metric ton, more than 15% higher
already imposed Section 232 trade actions. These include S.
than the global price. In addition, U.S. primary aluminum
3230 in the 115th Congress to undo the Section 232 tariffs
production rose by 12% from 2018 to 2020, but total
on aluminum and steel imports from Canada, Mexico, and
aluminum production (primary plus secondary) fell 9%.
the European Union and bills to check or modify the
authority previously delegated to the President. None have
Century Aluminum, represented by the American Primary
become law.
Aluminum Association (APAA), is the main proponent of
the Section 232 tariffs and chiefly a domestic producer.
Michaela D. Platzer, Specialist in Industrial Organization
Since 2018, Century has added some capacity domestically.
and Business
One of its three U.S. smelters is fully operational.
Heidi M. Peters, Analyst in U.S. Defense Acquisition
Magnitude 7 Metals, another APAA member and solely a
Policy
domestic producer, operates the nation’s third-largest
https://crsreports.congress.gov
U.S. Aluminum Manufacturing: National Security and Tariffs
IF11787
Rachel F. Fefer, Analyst in International Trade and
Finance
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF11787 · VERSION 1 · NEW
March 11, 2021
U.S. Aluminum Manufacturing: National Security and Tariffs
Aluminum—a lightweight, ductile, malleable, and
Russia, Canada, and the United Arab Emirates, ranked in
corrosion-resistant metal—is increasingly used in many
order. The United States was ninth.
industrial and technological applications, including in
At year-end 2020, three companies—Alcoa, Century
products used for national defense and lower emission
Aluminum, and Magnitude 7 Metals—operated six primary
vehicles. In Congress, views on the aluminum industry
aluminum smelters in the United States, compared to five
generally diverge between those who support policies to
companies operating nine primary smelters domestically in
increase domestic production for national security and
2010. Primary smelters operated at about 49% capacity in
economic reasons and others who argue that such policies
2020, down from 60% in 2019. U.S. secondary aluminum
may raise aluminum prices and harm aluminum-consuming
production was 3.2 million metric tons in 2020, over three
sectors (e.g., transportation equipment, containers and
times U.S. primary aluminum production. China was the
packaging, and construction).
world’s largest producer of secondary aluminum in 2019,
Domestic Aluminum Manufacturing
followed by the United States and Japan.
Aluminum is manufactured through two distinct processes
Factors Affecting U.S. Production
(see Figure 1). Primary aluminum production consists of
In addition to imports and global overcapacity, high
mining bauxite, refining it to produce alumina, then
domestic costs depress U.S. production of primary
smelting it to yield aluminum. Secondary aluminum derives
aluminum. Comparatively high electricity costs in the
from recycled scrap metal. Sources of the scrap are (1) old
United States, where electricity can account for up to 40%
scrap, recovered from finished products such as used
of the cost of primary aluminum production, encourages
aluminum cans, auto parts, and aircraft; and (2) new scrap,
firms to locate smelters in countries such as Canada and
material left over from processing aluminum into consumer
Iceland with lower electricity costs. Exchange rates and
or industrial products.
labor costs may also adversely affect U.S. smelter
Figure 1. Aluminum Sources and Uses
production.
U.S. primary smelters also use older, less energy-efficient
technologies than newer plants in the Middle East and Asia.
The newest U.S. primary smelter opened in 1980. Primary
smelting also involves large capital investments: a new
smelter may represent at least a $2 billion investment. In
recent years, several U.S. primary aluminum production
facilities have reduced production or closed partly due to
industry consolidation. CRS is not aware of any aluminum
Source: Figure adapted by CRS from NERA Economic Consulting,
producers having announced plans to build new primary
Impacts of Potential Aluminum Tariffs on the U.S. Economy, June 2017.
smelters in the United States.
Production of secondary aluminum is usually more
Secondary aluminum can be substituted for primary
economically attractive, as the capital cost of a secondary
aluminum in most uses; however, primary aluminum is
smelter is much lower than for a primary aluminum smelter.
favored in applications with high quality and consistency
The Energy Information Administration estimates
requirements, such as electronics and aerospace
secondary smelters use 6% of the energy required by
manufacturing. A few smelters worldwide produce primary
primary smelters. One company reportedly plans to build a
aluminum of sufficient purity for use in military aircraft, as
new rolling mill in the United States for secondary
well as in lightweight armor plating found in many defense
aluminum.
ground and weapon systems. According to the Department
U.S. Demand for Aluminum Products
of Defense (DOD), military requirements for aluminum
represent about 3% of total U.S. consumption of aluminum.
The economic downturn in 2020 caused by the COVID-19
In 2020, U.S. production of primary aluminum totaled 1.0
pandemic contributed to shut downs or reduced production
million metric tons, reports the U.S. Geological Survey
at the facilities of U.S. aluminum-consuming industries,
(USGS), well below peak domestic production of 4.7
reducing U.S. consumption of aluminum to 2.9 million
million metric tons in 1980. The United States was the
metric tons, down 41% from 2018, according to USGS.
world’s top producer through 2000. By 2020, the United
Likewise, imports of primary aluminum shrank to 3.2
States accounted for 1.5% of the world’s primary aluminum
million metric tons in 2020, a drop of 42% from 2018.
production. Global overcapacity, driven by certain foreign
More than two-thirds of U.S. primary aluminum imports in
government subsidies—particularly by China—has reduced
2020 were from Canada, where Alcoa operates three
the global price of aluminum. After China, the world’s
primary aluminum smelters, followed by the United Arab
largest producers of primary aluminum in 2020 were India,
Emirates, Argentina, and Russia. The United States imports
https://crsreports.congress.gov
link to page 2 link to page 2 U.S. Aluminum Manufacturing: National Security and Tariffs
a small amount of secondary aluminum, a total of 530,000
smelter by capacity. The company has said it may be forced
metric tons in 2020.
to shutter its smelter if the tariffs are removed.
China, which became the world’s largest primary aluminum
Alcoa, the largest domestic producer with substantial
producer in 2002, accounted for more than half the world’s
overseas production, opposes the tariff, and has not
production in 2020, but does not export it in commodity
restarted any domestic capacity and has curtailed its smelter
form to the United States. Instead, China ships to the United
in Washington. The Aluminum Association, the industry’s
States semi-fabricated aluminum products, such as bars,
broadest trade group representing Alcoa, as well as
rods, and wire, which are subject to U.S. trade actions.
aluminum recyclers, fabricators, and industry suppliers,
Aluminum Industry Jobs and Wages
opposes the U.S. tariff on aluminum imports. It has asked
for a global forum to discuss aluminum excess capacity,
U.S. aluminum manufacturing employed an annual average
subsidies by China, and a U.S.-Chinese negotiated
of 60,585 workers in 2019, according to the Bureau of
agreement.
Labor Statistics (BLS). Of these, jobs in primary and
secondary aluminum production numbered 14,224; BLS
Companies can petition the Commerce Department to
preliminary data show employment at 13,217 in June 2020.
exclude specific imported aluminum products from the
The remaining jobs are at facilities that make rolled or
Section 232 tariffs. As of February 7, 2021, Commerce has
extruded products from primary or secondary aluminum.
received 27,571 product exclusion requests, including from
Alcoa; the agency has granted about 60% of the requests.
Primary aluminum workers earned an average wage of
Some U.S. firms have testified before Congress that the
$81,522 in 2019, higher than the average wage of $69,920
exclusion process is burdensome, opaque, and costly.
for all U.S. manufacturing workers. The secondary
Commerce is implementing some changes to the process
aluminum sector paid an average wage of $63,328 in 2019.
and a monitoring system requiring importers to share data,
Though the 10% tariff imposed by the Trump
such as the country where aluminum used in the
Administration on certain aluminum products (see “Trump
manufacture of the imported product was smelted and
Administration Actions” below) may have been a factor in
poured.
sustaining some jobs domestically in aluminum
The United States-Mexico-Canada Agreement (USMCA),
manufacturing in 2018 and 2019, preliminary data show the
in effect since July 1, 2020, requires 70% North American
combined number of jobs in primary and secondary
aluminum content for auto parts and vehicles to qualify for
aluminum manufacturing shrank 9% in June 2020 from
tariff-free trade. This may increase demand for North
June 2019. This is attributable, in part, to a decision by
American aluminum over time as the average vehicle
Alcoa in April 2020, to fully curtail “uncompetitive
smelting capacity”
gradually uses more aluminum to meet USMCA rules of
at its aluminum smelter in Washington,
origin requirements.
citing “declining market conditions.”
Trump Administration Actions
Other Congressional Considerations
In 2020, some Members sought to add aluminum and
To address the national security implications of aluminum
aluminum alloys to DOD’s specialty-metals provision (10
imports, in March 2018, the Trump Administration imposed
U.S.C. §2533b) and to apply to DOD and the Department
a 10% tariff, or in some cases a quota, on U.S. imports of
of Transportation a domestic sourcing mandate. Neither
certain aluminum products from almost all countries, and in
provision was included in the FY2021 National Defense
January 2020, expanded the tariff to certain derivative
Authorization Act (NDAA; P.L. 116-283).
aluminum products. The tariffs and quotas were applied
under Section 232 of the Trade Expansion Act (19 U.S.C.
Some Members have expressed concern that insufficient
§1862, as amended), which allows a President to restrict
domestic production of primary aluminum could pose a
imports if the Department of Commerce (Commerce) finds
grave risk in a national security crisis. These Members have
they threaten or impair U.S. national security. The Biden
advocated for the President to employ Title III of the
Administration has not announced plans to remove or
Defense Production Act (DPA; 50 U.S.C. §4533) to offer
amend the tariffs.
U.S. aluminum producers economic incentives, such as loan
According to Commerce’s Section 232 report on aluminum,
guarantees or purchase commitments. The FY2021 NDAA
requires the Secretary of Defense to submit a report to
a primary aim of the Trump Administration’s 10% tariff
Congress, due not later than March 1, 2022, on how the
was to raise the price of imported aluminum to encourage
DPA could be used to increase domestic aluminum
domestic manufacturers to restart idled capacity. USGS
refining, processing, and manufacturing.
figures show that from January to November 2020, the
average price of primary aluminum in the United States
Past Congresses have considered legislation to override the
registered at $1,944 per metric ton, more than 15% higher
already imposed Section 232 trade actions. These include S.
than the global price. In addition, U.S. primary aluminum
3230 in the 115th Congress to undo the Section 232 tariffs
production rose by 12% from 2018 to 2020, but total
on aluminum and steel imports from Canada, Mexico, and
aluminum production (primary plus secondary) fell 9%.
the European Union and bills to check or modify the
authority previously delegated to the President. None have
Century Aluminum, represented by the American Primary
become law.
Aluminum Association (APAA), is the main proponent of
the Section 232 tariffs and chiefly a domestic producer.
Michaela D. Platzer, Specialist in Industrial Organization
Since 2018, Century has added some capacity domestically.
and Business
One of its three U.S. smelters is fully operational.
Heidi M. Peters, Analyst in U.S. Defense Acquisition
Magnitude 7 Metals, another APAA member and solely a
Policy
domestic producer, operates the nation’s third-largest
https://crsreports.congress.gov
U.S. Aluminum Manufacturing: National Security and Tariffs
IF11787
Rachel F. Fefer, Analyst in International Trade and
Finance
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff to
congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
Information in a CRS Report should not be relied upon for purposes other than public understanding of information that has
been provided by CRS to Members of Congress in connection with CRS’s institutional role. CRS Reports, as a work of the
United States Government, are not subject to copyright protection in the United States. Any CRS Report may be
reproduced and distributed in its entirety without permission from CRS. However, as a CRS Report may include
copyrighted images or material from a third party, you may need to obtain the permission of the copyright holder if you
wish to copy or otherwise use copyrighted material.
https://crsreports.congress.gov | IF11787 · VERSION 1 · NEW