Are tariffs the answer to save America’s declining aluminium industry?
On the banks of the Ohio River in a rural corner of one of America’s poorest states sit two factories, one next to the other.
One is open. The other is shuttered. Both cut to the heart of what Donald Trump hopes he can do to transform America’s industrial base.
Ravenswood, West Virginia, is a town built on aluminium. Since the 1950s, the wonder-metal has kept this place on the map.
Once upon a time, the metal itself was produced here. A massive smelting plant dominated the skyline, and inside, huge furnaces, transforming American aluminium ore (alumina) into the metal we recognise.
The newly smelted metal was then sent by river, rail and road to other factories dotted across the country to be cast – turned to sheet and coil for the nation’s cars, planes, trucks and so much more.
The Kaiser Aluminium plant closed its smelters in 2009
Kaiser Aluminium closed its smelters in 2009. The plant now sits idle. Fencing surrounds it; grass partially obscures the entrance, where hundreds of workers would once have passed.
Two hundred metres down the road, there is a different story.
Constellium Ravenswood is one of the world’s largest factories of its kind.
With over a thousand employees it produces plate, sheet and coiled aluminium for numerous industries: aerospace, defence, transportation, marine and more.
Its products are custom designed for clients including Boeing, Lockheed Martin and NASA.
But here’s the problem. The Constellium plant uses aluminium now sourced from abroad. America’s primary aluminium production has dropped off a cliff over the past few decades.
The Kaiser plant next door which could have provided the metal for its neighbour to process and press was instead the victim of cheap foreign competition and high energy costs.
Smelting aluminium requires huge amounts of constant energy. If the smelters are ever turned off, the metal inside will solidify, destroying the facility.
Constellium Ravenswood is one of the world’s largest factories of its kind
In 2023, the annual rate of US primary aluminium production fell 21.4% on the previous year, according to the Aluminium Association.
However, the Canadian Aluminium Association projected that their annual production would be up by 6.12% in 2024 compared to the previous year.
The story is clear – this industry, like so many in America, is in steep decline. Competition and high production and energy costs are having a huge impact.
The danger ahead is that secondary aluminium production in America could go the way of primary production: firms down the supply chain could choose to buy their sheeting and coils from abroad too.
The answer, says President Trump, is tariffs. And the chief executive of Constellium agrees with him.
“We believe in free AND fair trade,” Jean-Marc Germain told Sky News from the company’s corporate headquarters in Baltimore. “And the point is that trade has been free but not fair.”
“There has been massive growth in the capacity installed in China. Kudos to the Chinese people, that is admirable, but a lot of that has been allowed by illegal subsidies. What it means is that overall, trade of aluminium products is broken as an international system. And I think those tariffs are a way to address some of that very uneven playing field that we are seeing today.”
Mr Germain says the tariff plan will reset the market. He accepts that blanket tariffs are a blunt and risky tool, but cuts out circumvention by one country to another.
“Obviously, this process creates some collateral damage. It is clear that not all countries and not all products are unfairly traded. But because of the sheer size of China and the history of Chinese production making its way through certain countries into the US… a blunt approach is required,” he says.
Jean-Marc Germain, chief executive of Constellium, agrees with Trump’s tariffs
The White House 25% tariff plan for steel and aluminium is global and causing huge angst.
Experts say a long-term domestic rebalance, revitalising the American industrial sector, will take many years and is not guaranteed.
But upending the status quo and disrupting established supply chains risks significant short and medium-term disruption, both at source and destination.
The foreign aluminium arriving at Ravenswood’s Constellium plant to be pressed will now cost 25% more – a hike in price which Mr Germain says his firm can ride out to achieve the longer-term rebalance.
“I’m not going to say that an increase in cost is a good thing for customers. But I think it’s important to look at things and put them in proportion…” he says.
Proportion is not a luxury all can afford. 250 miles to the east, in Washington DC and just four miles from the frenetic policy decisions at the White House, the Right Proper Brewing Company is a dream realised for Thor Cheston.
Thor shows me around his small warehouse-based business that is clearly thriving.
He takes me to the grain silos around the back. The grain is from Canada.
Thor relies on an international supply chain – the cans are aluminium and from Canada too. Some of the malt is from Germany and from Britain.
It is a complex global web of manufacturing to make American beer. Margins are tight.
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“We don’t have the luxury of just raising our prices. We’re in a competitive landscape,” Thor says. Competition with big breweries, who can more easily absorb increased costs.
The cans will probably go up in price on his next order. He doesn’t yet know how much of the 25% will be passed on to him by his supplier.
“We’ve dealt with major problems like this before. We’ve had to pivot a lot. We have survived the global pandemic. We’ve done it before, but we don’t want to. We just need a break.”
What about the government’s argument to ‘buy American’?
“It’s not as simple as that,” Thor says.
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Will there be impacts from Trump’s latest tariffs?
Back in West Virginia the mighty Ohio River snakes past the Ravenswood factories.
It still carries what’s left of America’s heavy industry. A vast multi-vessel barge full of coal passed as I chatted to locals in the nearby town of Parkersburg, a pleasant place but not the thriving industrial community it once was.
“We used to have a really nice aluminium plant right down the river here and it shut down,” one resident reflects in a passing conversation.
Here you can see why many rolled the dice for Trump.
Sam Cumpstone said Obama ruined lives in West Virginia by shutting down mines
“In West Virginia, we’re big on coal,” Sam Cumpstone tells me.
He works in the railways to transport coal. The industry went through economic devastation in the late noughties, the closure of hundreds of mines causing huge unemployment.
Sam is clear on who he blames: “Obama shut down mines and made ghost towns in West Virginia. It ruined a lot of people’s lives.”
There is recognition here that Trump’s sweeping economic plans could cause prices to rise, at least in the short term. But for Trump voter Kathy Marcum, the pain would be worth it.
Trump supporter Kathy Marcum believes tariffs are the way forward
“He’s putting tariffs on other countries that bring their things in, and that way it equals out. It has to be even-stevens as far as I’m concerned… He is a smart businessman. He knows what the hell he’s talking about.
“It might be rough for a little while, but in the long run I think it will be best for the country.”
Communities have been let down over generations – either by politicians or by inevitable globalisation. There is still deep scepticism here.
“No politician worth millions or billions of dollars cares about me or you. Nobody,” Sam tells me at the end of our conversation.
The Trump tariff blueprint is full of jeopardy. If it fails, it will be places like West Virginia, that will be hit hardest again.
US
Financial markets were always going to respond to Trump tariffs but they’re also battling with another problem
Stock markets around the world fell on Thursday after Donald Trump announced sweeping tariffs – with some economists now fearing a recession.
The US president announced tariffs for almost every country – including 10% rates on imports from the UK – on Wednesday evening, sending financial markets reeling.
While the UK’s FTSE 100 closed down 1.55% and the continent’s STOXX Europe 600 index was down 2.67% as of 5.30pm, it was American traders who were hit the most.
Trump tariffs latest: US stock markets tumble
All three of the US’s major markets opened to sharp losses on Thursday morning.
The S&P 500 is set for its worst day of trading since the COVID-19 pandemic. File pic: AP
By 8.30pm UK time (3.30pm EST), The Dow Jones Industrial Average was down 3.7%, the S&P 500 opened with a drop of 4.4%, and the Nasdaq composite was down 5.6%.
Compared to their values when Donald Trump was inaugurated, the three markets were down around 5.6%, 8.7% and 14.4%, respectively, according to LSEG.
Worst one-day losses since COVID
As Wall Street trading ended at 9pm in the UK, two indexes had suffered their worst one-day losses since the COVID-19 pandemic.
The S&P 500 fell 4.85%, the Nasdaq dropped 6%, and the Dow Jones fell 4%.
It marks Nasdaq’s biggest daily percentage drop since March 2020 at the start of COVID, and the largest drop for the Dow Jones since June 2020.
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The latest numbers on tariffs
‘Trust in President Trump’
White House press secretary Karoline Leavitt told CNN earlier in the day that Mr Trump was “doubling down on his proven economic formula from his first term”.
“To anyone on Wall Street this morning, I would say trust in President Trump,” she told the broadcaster, adding: “This is indeed a national emergency… and it’s about time we have a president who actually does something about it.”
Later, the US president told reporters as he left the White House that “I think it’s going very well,” adding: “The markets are going to boom, the stock is going to boom, the country is going to boom.”
He later said on Air Force One that the UK is “happy” with its tariff – the lowest possible levy of 10% – and added he would be open to negotiations if other countries “offer something phenomenal”.
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How is the world reacting to Trump’s tariffs?
Economist warns of ‘spiral of doom’
The turbulence in the markets from Mr Trump’s tariffs “just left everybody in shock”, Garrett Melson, portfolio strategist at Natixis Investment Managers Solutions in Boston, told Reuters.
He added that the economy could go into recession as a result, saying that “a lot of the pain, will probably most acutely be felt in the US and that certainly would weigh on broader global growth as well”.
Meanwhile, chief investment officer at St James’s Place Justin Onuekwusi said that international retaliation is likely, even as “it’s clear countries will think about how to retaliate in a politically astute way”.
He warned: “Significant retaliation could lead to a tariff ‘spiral of doom’ that could be the growth shock that drags us into recession.”
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Tariffs about something more than economics: power
It comes as the UK government published a long list of US products that could be subject to reciprocal tariffs – including golf clubs and golf balls.
Running to more than 400 pages, the list is part of a four-week-long consultation with British businesses and suggests whiskey, jeans, livestock, and chemical components.
Meanwhile, Prime Minister Sir Keir Starmer said on Thursday that the US president had launched a “new era” for global trade and that the UK will respond with “cool and calm heads”.
It also comes as Canadian Prime Minister Mark Carney announced a 25% tariff on all American-imported vehicles that are not compliant with the US-Mexico-Canada trade deal.
He added: “The 80-year period when the United States embraced the mantle of global economic leadership, when it forged alliances rooted in trust and mutual respect and championed the free and open exchange of goods and services, is over. This is a tragedy.”
Tanking stock markets, collapsing world orders, devastating trade wars; economists with their hair ablaze are scrambling to keep up.
But as we try to make sense of Donald Trumps’s tariff tsunami, economic theory only goes so far. In the end this surely is about something more primal.
Power.
Understanding that may be crucial to how the world responds.
Yes, economics helps explain the impact. The world’s economy has after all shifted on its axis, the way it’s been run for decades turned on its head.
Instead of driving world trade, America is creating a trade war. We will all feel the impact.
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PM will ‘fight’ for deal with US
Donald Trump says he is settling scores, righting wrongs. America has been raped, looted and pillaged by the world trading system.
But don’t be distracted by the hyperbole – and if you think this is about economics alone, you may be missing the point.
Above all, tariffs give Donald Trump power. They strike fear into allies and enemies, from governments to corporations.
This is a president who runs his presidency like a medieval emperor or mafia don.
It is one reason why since his election we have seen what one statesman called a conga line of sycophants make their way to the White House, from world leaders to titans of industry.
The conga line will grow longer as they now redouble their efforts hoping to special treatment from Trump’s tariffs. Sir Keir Starmer among them.
President Trump’s using similar tactics at home, deploying presidential power to extract concessions and deter dissent in corporate America, academia and the US media. Those who offer favours are spared punishment.
His critics say he seeks a form power for the executive or presidential branch of government that the founding fathers deliberately sought to prevent.
Whether or not that is true, the same playbook of divide and rule through intimidation can now be applied internationally. Thanks to tariffs
Each country will seek exceptions but on Trump’s terms. Those who retaliate may meet escalation.
This is the unforgiving calculus for governments including our own plotting their next moves.
The temptation will be to give Trump whatever he wants to spare their economies, but there is a jeopardy that compounds the longer this goes on.
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Could America’s traditional allies turn to China? Pic: AP
Malcolm Turnbull, the former Australian prime minister who coined the conga line comparison, put it this way: “Pretty much all the international leaders I have seen that have sucked up to Trump have been run over. The reality is if you suck up to bullies, whether it’s global affairs or in the playground, you just get more bullying.”
Trading partners may be able to mitigate the impact of these tariffs through negotiation, but that may only encourage this unorthodox president to demand ever more?
Ultimately the world will need a more reliable superpower than that.
In the hands of such a president, America cannot be counted on.
When it comes to security, stability and prosperity, allies will need to fend for themselves.
And they will need new friends. If Washington can’t be relied on, Beijing beckons.
America First will, more and more, mean America on its own.
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