China tariffs will boost national security: Century Aluminum CEO

The Biden administration's decision to impose tariffs on $18 billion worth of Chinese goods across various sectors, including aluminum and steel, has sparked discussions about the potential benefits for domestic manufacturers. Yahoo Finance Executive Editor Brian Sozzi is joined by Century Aluminum (CENX) CEO Jesse Gary to discuss how these aluminum and steel tariffs against China will benefit American producers and plant workers, including that of his own company.

Gary highlights a concerning imbalance, emphasizing that China produces a staggering 60% of the world's aluminum, while the United States has only 4 smelters dedicated to aluminum production— attributing this to "unfair trade practices on the Chinese side." Gary notes that aluminum has a plethora of use cases in modern-day life, making the inability to produce it domestically "a major problem."

"Everyone realizes that in order to be secure, in order to have economic security and national security, we need to be able to produce these core critical minerals at home," Gary tells Yahoo Finance, adding that he is "thrilled" to see the promotion of domestic manufacturers through these tariff measures.

Catch Brian Sozzi's exclusive interview with President Biden where he discusses what these new trade tariffs hope to achieve.

For more expert insight and the latest market action, click here to watch this full episode.

This post was written by Angel Smith

Video transcript

Jesse.

Thanks so much for joining our finance.

We appreciate it.

Thanks, glad to be here.

So uh the president has come out very strong uh new towers on certain sectors.

Tell us how China's practices have impacted your business and your industry.

Yeah, I mean, there's a very good example.

So since the year 2000, the Chinese produced 5% of world aluminum.

At that point today, they produce over 60% of the world's aluminum.

That same time period, us had 25 smelters in 2000.

Today we're down to four.

So this massive overcapacity fueled by sort of unfair trade practices from the Chinese side has had this direct impact on us.

Aluminum production.

Sounds like a potential national security issue if we only have what, four smelters in this country.

That's right.

Absolutely.

And aluminum is in everything.

I spoke about it a bit today.

Uh It's everywhere from foil, in your, in your, in your kitchen, to electric vehicles, to fighter jets, to missiles.

It's, it's, it's everywhere in modern life and to not be able to produce it here.

It's a major problem.

Now, China said it would take their response to this, they would take the appropriate actions.

What would any actions from them mean to your industry?

Well, not much to be honest here at century, we're focused on bringing aluminum production back to the United States.

Uh You may have seen, we just received a grant from the Department of Energy for $500 million to build the first new aluminum smelter in the United States in 45 years.

Yes.

Yes.

So we'll have five and that take some time to get done.

Of course, this hasn't been done in 45 years, but we are super excited because in contrast to what the Chinese have done, our smelter will be green, it will be powered with cutting edge technology and renewable energy which will make it one of the greenest smelters in the world.

Why have these jobs in this industry moved over to China and overseas?

Well, it's really from Chinese industrial practice, subsidies, unfair labor practices, uh unfair trade practices dumping their metal onto the world market that's made it very difficult for uh Western producers to compete.

Um And so we are very thrilled that this administration has really stood up for, you know, domestic manufacturers and is focused on bringing manufacturing back here to the US.

What do you think will be the impact on inflation in this country to let's say aluminum foil, you know, putting it right directly to your industry, do these towers bring prices down?

And, and when does that even happen?

Yeah.

Well, I, I think one thing to keep in mind is the US is very short aluminum.

Uh, we don't, we don't produce enough or down to four.

We don't have enough to, to service our needs.

And from a, so from a security perspective, it's very important that we can produce what we need and we're 4 million tons short on, on the aluminum side to be able to do that.

So we're not any, even anywhere close to being able to produce our own needs, uh which is the real focus and we need to be able to do that from a national security perspective.

I mentioned this when I chatted with the, uh, the president.

Uh, look, the economy has been solid.

GDP, unemployment rate, wage gains.

Do you see that strength in your business?

Yeah, we started to see things turn, I will say on the manufacturing side, we did see some weakness uh for a period, but things have started to improve, uh earlier this year and things are starting to look up.

So we're excited about what's to come.

Can you compare what the Biden administration has done to what President Trump did now?

He championed himself as pro manufacturing, bringing jobs back to the US.

What did you see?

Yeah, I would say we've been thrilled with what the Biden administration has done.

Uh This focus on reshoring manufacturing, uh has led to direct investment from both century uh and others throughout uh the US economy.

Uh And I think what you're seeing just more broadly to speak to that is that everyone realizes that in order to be secure, in order to have economic security and national security, we need to be able to produce these core critical minerals at home.

Uh And we are ready to be a big part of that as a, as a key leader.

Um We're coming up right against the the election.

Are you planning your business differently and or preparing for potential outcomes that may not be so good for the country?

Uh No, I mean, we're very bullish on the United States.

We wouldn't be announcing the first new smelter in 45 years.

If we weren't bullish on the United States, we think this is a great place to do business.

We think we can make a product that will be consumed here in the United States.

We can offer shorter supply chains to our customers.

Uh And so we're just excited and we're moving forward with full steam ahead uh and excited for what's to come.

What is the next decade of job creation look like for the aluminum industry?

Do you see yourself building that, that six smelter at some point?

Yeah, we hope so.

I mean, we hope to get the first phase of this new smelter done and then we hope to expand it after that.

Uh I mean, we've already said it will be 1000 new jobs at this one smelter alone will double the size of the US industry in and of itself.

Um So we'll start with that, but we definitely have expansion plans beyond them.

You know, I've talked to a couple of my contacts in the, in the chip making industry and they're opening up really big bold, new shiny facilities to make chips in this country.

But they're saying it's hard to find jobs.

Is it hard to find the labor you need for that smelter or another facility that you may wanna open?

Yeah, we've got a great workforce.

You know, we've, we've run smelters in this country for a long time.

Uh, our workers are highly trained, uh, highly skilled.

Uh, and we pay a living wage to our workers very good wage.

Uh And so what we found is if we invest in the community, we tend to be able to find the labor force we need in order to run the smelters and that's what we'll continue to do.

All right, we'll leave it there, Jesse.

Uh, thanks so much for making time for you all.

Find us.

We appreciate it.

Thanks, Brian.

Pleasure.