Pennsylvania would benefit from the elimination of aluminum tariffs
Record inflation is hurting Americans — and soaring aluminum prices epitomize this consumer crisis. According to recent data released by the Bureau of Labor Statistics, our national inflation has exceeded 8%. The price of everyday consumer goods continues to climb, and businesses and consumers are struggling to keep up.
Increasingly expensive key raw materials, such as aluminum, have caused particular economic disruption. In response, some experts recommend that policymakers repeal onerous tariffs to reduce costs for businesses and, therefore, prices for consumers.
Fortunately, members of Congress are listening, as is Sens. Pat Toomey, R-Pa.; and Mark Warner, D-Va., are working to repeal Section 232 tariffs on aluminum and ease the tax burden on consumers.
The aluminum industry is a very lucrative sector for Pennsylvania. The sector employs thousands of residents and pays more than $816 million in wages.
More generally, important sectors such as manufacturing, agriculture and construction depend on affordable aluminium. Manufacturing is Pennsylvania’s second-largest industry by gross domestic product, and agriculture generates nearly $3 billion. When the considerable economic impact of aluminum is taken into account, the industry is responsible for $10.5 billion.
Recent years of economic turmoil have hurt Pennsylvania’s aluminum industry and economy. The price of aluminum per ton rose from $1,600 to over $3,000. Meanwhile, Keystone State has seen unemployment that hit 16.5% in April 2020 and is still struggling to return to pre-pandemic levels. This bad news hurts consumers, because aluminum is crucial for critical industries.
Our close relationship with farmers across the state has given us insight into the detrimental impact of high aluminum prices on the agricultural sector.
Farmers looking to repair or replace their equipment cannot afford inflated prices or have to wait for spare parts. These delays limit crop yields and threaten farmers’ bottom lines. As a result, consumers have to pay more and more for everyday products.
The American Security Project has proposed a solution: eliminate Section 232 aluminum tariffs. In a recent paper, the ASP proposes that Congress repeal these harmful tariffs that favor carbon-intensive Chinese aluminum.
Eliminating these levies would be a smart environmental and economic pivot – shifting national aluminum consumption to low-carbon aluminum forged with hydroelectricity.
Current tariffs have overtaken the price of low-carbon aluminum, forcing American companies to depend on cheap Chinese aluminum forged in coal-fired smelters. By eliminating Section 232 or ensuring we don’t reduce tariffs on high-carbon aluminum, policymakers can incentivize low-carbon aluminum and implement smarter green initiatives. .
Toomey is working with Warner in the Senate to repeal Section 232 tariffs, boost our economy and promote environmental policy. Their legislation, called the Bicameral Congressional Trade Authority Act, would eliminate Section 232 and limit harmful tariffs that plague American consumers.
The Toomey/Warner bill has already received numerous endorsements from trade associations and consumer advocates.
The adoption of this legislation is a concrete step to reduce inflation by reducing the cost of aluminum. Section 232 has raised the price of a fundamental commodity, and repealing this tariff promises much-needed relief for businesses and consumers.
As the ASP notes, eliminating Section 232 would promote US consumption of low-carbon aluminum, an important step in reducing our national carbon footprint while diverting funds from Chinese coffers. We need lawmakers to deal with record inflation, and the bicameral Congressional Trade Authority Act promises the action we need.