The White House’s Power Over Aluminum Plants: Josh Hawley’s Perspective

In response to the news that an aluminum smelting plant in southern Missouri will soon close, Sen. Josh Hawley (R–Mo.) has asked—nay, demanded—that President Joe Biden use his powers to keep the plant open. “I urge you to take the appropriate actions necessary to keep the smelter open, to ensure the continuity of operations, and to preserve production jobs—including by deploying the authorities of the Defense Production Act of 1950,” Hawley wrote in a letter to the White House this week. “Doing so will preserve good-paying union jobs and safeguard national security.” The modern presidency has tremendous powers, of course, but this is still quite the stretch. Hawley is asking the White House to engage in central planning at an absurdly micro-level—and there is, thankfully, no law that actually allows the president to order a factory to continue producing aluminum if its owners have decided to stop. Even so, the fact that Hawley is even making this request illustrates something important about how Republicans now view the relationship between government and business. It also says something about how the failures of protectionism will spur calls for more protectionism. And, finally, about how the phrase “national security” has become warped beyond recognition to justify further governmental intrusions into the economy. But let’s start with the Defense Production Act, which allows presidents to expedite governmental purchases of certain materials viewed as critical to national defense. Though it had been rarely used before the COVID-19 pandemic, it has recently become a favorite tool of would-be economic authoritarians on both sides of the aisle, and some lawmakers now seem to believe there are virtually no limits to how it can be used. Democrats have asked Biden to use it to promote green energy projects, and Biden has already invoked it to “accelerate domestic production” of solar panels under the questionable notion that solar panels are “essential to the national defense.” Even home insulation is now the subject of a Defense Production Act order, because it is somehow critical to defending America from a foreign invasion—of cold air, one assumes, likely a nefarious plot by those shifty Canadians. The act was also invoked during the baby formula shortage of 2022, as if a government-created problem could be solved by the White House simply demanding that more formula be brought into existence. That’s how economies work, right? It might shock Hawley and some of his colleagues to learn that the Defense Production Act is not a set of magic words that allow presidents to do whatever they’d like. In fact, all the law does is require that businesses fulfill orders from the government before other orders from private customers. That’s because it is a law meant to be used during wartime. Here’s how it works: Let’s say there’s a war going on and the U.S. military desperately needs 10,000 widgets to ensure victory, lasting peace, and blah blah blah. The Pentagon sends a guy to the widget factory in Albuquerque to request those 10,000 widgets, but the owner of the factory says the 10,000 widgets sitting on his lot have already been purchased by his friend Bob and that the government will have to wait until the factory can produce another 10,000 widgets—so come back in two weeks. Ah, but wait! The president just signed an order invoking the Defense Production Act for widgets, so now the guy from the Pentagon gets to cut the line. He can buy those 10,000 widgets, and Bob has to wait for the next set to come off the assembly line. That’s what the Defense Production Act allows. It can’t conjure up new solar panels or additional supplies of insulation out of thin air. It doesn’t allow the government to put a gun to anyone’s head and force them to make baby formula or to keep an aluminum smelter running. And that’s good. Let’s consider for a moment the alternative reality where Hawley apparently resides—a reality where the Defense Production Act somehow gives the sitting president the power to shape not only whole industries but to direct exactly what products are manufactured in which places. Sure, why shouldn’t presidents have the authority to decide how many people are employed in which factories all across the country? Once, I might have asked a different rhetorical question about whether conservatives would want to live in a country where the president had such immense powers over the market—but it is now increasingly apparent that many of them do. That’s a seriously toxic problem in our politics right now: large portions of both major parties are committed to the idea that more central planning and a more powerful chief executive would benefit the country economically. And that’s why there is so much chatter about the Defense Production Act, and why the federal government is wasting so much money on other centrally planned boondoggles. Hawley’s call for more government intervention to protect aluminum manufacturing jobs should also spur some reflection about the last major government intervention that was supposed to protect aluminum manufacturing jobs. Remember those 10 percent tariffs on imported aluminum imposed by then-President Donald Trump in 2018? That was naked protectionism, and the announced closure of this Missouri smelter seems like pretty good evidence that it failed. There’s other evidence too: As Hawley points out in his letter, this is the third aluminum smelter in the U.S. to announce plans to downsize in recent months. Unfortunately, the failures of protectionism only ever seem to spur calls for more protectionism. Finally, let’s address the idea that American national security is somehow weakened by the closure of a single aluminum plant that employs 400 people. In some ways, this is the crux of Hawley’s argument for the federal government to get involved. In that letter to the White House, he wrote that “the impending shutdown of the smelter will also materially degrade our defense posture, as the Department of Defense has deemed aluminum a strategic material of interest.” It’s true that the United States does not produce enough aluminum to meet its annual demand, which is why we imported 5.9 million metric tons of it in 2022. But here’s the good news: there is plenty of aluminum available on the global market—and there would be more if the Biden administration lifted those tariffs. In 2022, more than 41 percent of the aluminum imported to the U.S. came from Canada and Mexico, hardly places that are likely to cut off trade in the event of a war. South Korea and Australia, also close U.S. allies, are the fastest-growing suppliers of aluminum to the United States. It is, of course, unfortunate that the closing of this aluminum smelter means about 400 workers will be out of a job. Hopefully, they will quickly find others. Tragic as it might be in the short term, this is the sort of thing that happens all the time in healthy economic systems, where resources (including labor) are constantly in flux. The idea that the closure of a single aluminum plant is a national security crisis that should require the direct intervention of the White House is, frankly, insane. By demanding that Biden get involved, Hawley is suggesting that there should be effectively no limits to a president’s power to intervene in the economy—exactly the sort of unchecked expansion of executive power that Republicans used to understand would be dangerous and counterproductive.