What an agricultural bail out could mean for aluminum

This embargo comes as U.S. farmers are harvesting the crop, and the lack of Chinese demand is worrisome. Soybean prices are down nearly 25% from the beginning of 2024.

Farmers are big backers of Trump. A casual glance at any political maps showing “red” versus “blue” states shows a massive concentration in the Midwest, South, and Intermountain states.

Republican lawmakers have warned farmers face financial calamity if they do not receive aid by the end of the year. Being naturally self-serving, these politicians are also worried about their ability to be re-elected. This fact is not lost on Trump.

Agriculture versus aluminum

Midwestern farmlands produce a bounty of not just soybeans, but corn and wheat. These crops also support a massive livestock sector, allowing the U.S. to be a massive exporter of beef, pork, and chicken.

The U.S. Department of Agriculture estimated exports were $176 billion in 2024 and generated another $186.9 billion in indirect economic benefit to the economy. An estimated 1.05 million jobs exist because of agriculture, of which 582,000 jobs are nonfarm.

We could check off many examples of major U.S. companies that depend on agriculture to drive their success (John Deere, Ford, Monsanto, Mosaic). Many of these companies use aluminum in the process. So, the aluminum industry has its own vested interest in seeing the agricultural sector remain financially healthy.

According to the U.S. Aluminum Association, the aluminum industry generates about $228 billion in economic activity each year. That makes it about two-thirds the size of the agricultural sector. We are BIG. Aluminum generates 164,000 direct jobs and 535,000 indirect jobs. We are generating about 70% of the jobs that agriculture does.

Hence, aluminum and agriculture deserve to be in the same conversation when it comes to financial support.

Isn’t Section 232 the financial support mechanism for aluminum (and steel)?

Critics of direct financial aid to aluminum versus agricultural will immediately point to Section 232, saying the 50% import taxes have effectively sent revenue to the section.

The important thing to bear in mind is Section 232 does not provide direct aid to the aluminum sector. Section 232 puts the statutory duty on aluminum but then leaves it to the marketplace to determine how to allocate that money. None of the revenue generated by Section 232 is given to smelters like Alcoa, Century or Magnitude 7.

Some would argue that Century has indirectly received part of the Section 232 largesse with its $500 million grant from the Department of Energy to build its new greenfield smelter. However, that grant was through the Infrastructure Investment and Jobs Act and the Inflation Reduction Act under the Biden administration. Very little of that funding has actually been disbursed to Century thus far, and with the rash of budget cuts at the federal level, it is debatable whether this grant even survives.

By comparison, the suggested $15 billion aid package for farmers would go directly to them.

Why agriculture and not industry?

I started my commodity career at Cargill, the agricultural giant based in Minnesota. I saw how government involvement in the agricultural sector was pervasive and frankly justifiable. When we think about mankind’s basic needs, it is food and water.

National security is a buzz word being used to justify actions across many sectors. This argument spawned in the agricultural sector. The EU, the U.S., Japan to name just a few, all have massive policies to protect their farmers. It’s because security of the food supply is paramount. So, it is understandable why this big aid package is being prepared for the agricultural sector.

The question is, why not direct aid to industry? And why not aluminum?

The fact that Section 232 exists tells us the government recognizes the unique importance of steel and aluminum. Perhaps it is time to challenge how the government chooses to support these sectors.

In fiscal year 2025, U.S. Customs and Border Protection estimates tariff collections are $4.83 billion for steel and $2.96 billion for aluminum.

The Tax Foundation estimated Section 232 tariffs in 2018 through 2024 were generating about $2.7 billion per year.

By comparison, in 2025, Midwest P1020 premiums have risen about $0.58 cents per pound ($0.20 over LME to $0.78 over LME). Assuming U.S. primary production is about 800,000 metric tons for this year, that appreciation would be worth around $959 million.

This means the U.S. Treasury has cleared about $2 billion in revenue over and above what has accrued to the two active primary producers: Alcoa and Century.

Meanwhile, the supply chain behind the producers has been absorbing the higher premium which eventually is reflected in the cost of beverage cans, cars and building products.

All this raises the question: Does the proposed direct aid plan to agriculture present an opportunity to change how the government chooses to support not just steel and aluminum, but industry in general?

Why this matters

The aluminum industry recognizes it has challenges to grow in the U.S. All these challenges relate to supply, not demand. We have identified areas that need investment to solve the supply challenge:

• Improved sortation technology to upgrade obsolete scraps to mill-grade quality. This would eliminate the need to export these obsolete scraps for lack of sufficient domestic demand.
• The infrastructure to capture used beverage containers needs substantial improvement to make recycling convenient and encourage diversion from solid waste.
• Our existing and envisioned new primary smelters need access to competitive electricity. The backlog of stranded generation in the interconnection queue has to be solved and incumbent grid operators need to be incentivized to get this stranded capacity on the grid.
• We need additional generation capacity at competitive prices to support all industry, not just data centers that pay big prices in exchange for creating a limited number of permanent jobs.
• Technical training for the next generation of a highly skilled manufacturing workforce.

If the U.S. government is prepared to dip into it tariff revenues to support agriculture, there is no reason they should not be looking at direct aid to aluminum investment projects that are equally as vital as our food supply.