Chinese subsidies decimating U.S. aluminium production, Brook Massey warns

China and other nations' concerted efforts to undermine American industries are widespread and widely acknowledged. Now, they have set their sights on a new target in Georgia: manufacturers specialising in extruded aluminium. This perspective comes from Brook Massey, President of MI Metals, Inc. in Millen.

Aluminium is one of the most essential materials in everyday products, ranging from automobiles to kitchen appliances and window frames. However, despite its significance, the U.S. extruded aluminium industry has faced challenges due to unfair competition from abroad. Led by China, fourteen countries are inundating the U.S. market with cheaply dumped and subsidised aluminium extrusions, jeopardising a $7 billion industry.

Thankfully, the U.S. government is actively exploring measures to protect the aluminium extrusion sector from these external threats. Georgians are particularly reliant on this support to safeguard their employment opportunities.

Brook Massey, President of MI Metals, highlights this concerning trend, saying that the root cause lies in China's stagnating economic growth, partly sparked by a collapse in its property market heavily reliant on aluminium extrusions. This downturn has led to China's persistent overproduction, flooding global markets with surplus supply as it shifts focus towards exports. Consequently, manufacturers in countries like Malaysia, Vietnam, Taiwan, Ecuador, and Colombia find themselves squeezed out of their markets and seeking refuge in the U.S., where they unload their excess extrusions. This influx of cheap exported extrusions has seen a notable uptick in recent years, significantly denting U.S. producers' sales.

Massey stated, "As a consequence, the aluminium extrusion industry is haemorrhaging thousands of jobs at a time when it should be adding them. Aluminium extruders in the U.S. directly employ 37,000 workers, many of them union members, and that doesn't include another 160,000 workers who are indirectly helped by aluminium extruders."

"My company, MI Metals, an aluminium extruder in rural Millen, feels the impact. The situation is dire. Like many other extruders, MI Metals has had a decline in sales and has been forced to reduce production."

"Our recent investment of $11 million to expand the plant is not just a testament to our belief in the potential of this industry but also a beacon of hope for the local economy. Once fully realised, this expansion is expected to create 50 new jobs, providing a significant boost to our community. Despite the current situation slowing down our plans, we remain optimistic and ready to seize opportunities as they arise."

The demand for aluminium extrusions has steadily risen in the United States. However, domestic manufacturers have struggled to ramp up production and compete with foreign counterparts who operate under different regulatory frameworks.

A similar scenario unfolded in 2010 when the aluminium extrusion industry faced a surge of unfairly traded imports. In response, the sector petitioned the federal government for assistance, leading to the imposition of tariffs on Chinese imports the following year. Regrettably, this move and the observed downturn in China's economy prompted Chinese producers to reroute their extrusions to other global markets. Consequently, there was a surge in exports from countries like Ecuador, Indonesia, Taiwan, and Malaysia to the U.S.

Chinese producers have extended their operations into third countries to maintain their focus on the U.S. market. For example, from 2020 to 2022, imports of aluminium extrusions from Mexico to the U.S. surged by over 80 per cent, with a significant portion originating from Chinese-owned enterprises.

The situation worsens as Chinese extruders aggressively expand their capacity in Mexico. Xusheng Group from China recently announced plans to establish a Coahuila, Mexico facility equipped with six extrusion press lines. This development represents a troubling escalation in the influx of unfairly traded aluminium extrusions, posing further risks to producers and workers in Georgia.

In response to this looming threat, a coalition comprising 14 U.S. aluminium extruders, including our company and the United Steelworkers union, petitioned the U.S. Department of Commerce and the International Trade Commission last year. They aim to advocate for the imposition of new antidumping and countervailing duties. These measures are crucial to addressing the unfair practices of aluminium extruders across 14 countries, including China.

The President of MI Metals said, "The Commerce Department needs to continue to assess the extent of dumping and subsidization by extruders in these nations and impose tariffs to correct the market imbalance. This would finally bring some security to workers in Georgia and around the country."

"American companies and workers can compete with anyone with a level playing field. However, this can only happen when foreign countries adhere to fair trade practices. The U.S. government must intervene to protect jobs in Georgia and elsewhere in the U.S."