The History of North American Cooperation on Aluminum and Steel
As the global rhetoric around trade heats up, aluminum and steel are two metals that have been unexpectedly thrust into the international spotlight.
Both metals are getting considerable attention as journalists and pundits analyze how tariffs may impact international markets and trade relations. But in that coverage so far, one thing that may have been missed is the interesting history and context of these metals, especially within the framework of trade in North America.
Aluminum and Steel in North America
Today’s infographic tells the story of an ongoing North American partnership in these goods, and how this cooperation even helped U.S. and Canadian efforts in World War 2, as well as in addressing other issues of national security.
Aluminum and steel are metals that are not only essential for industry to thrive, but they are also needed to build infrastructure and to ensure national security.
Because of the importance of these metals, countries in North America have been cooperating for many decades to guarantee the best possible supply chains for both aluminum and steel.
The History: Aluminum and Steel
Here are some of the major events that involve the two metals, from the perspective of North American trade and cooperation.
The Pittsburgh Reduction Company, later the Aluminum Company of America (Alcoa), begins construction of a power plant and aluminum smelter in Shawinigan Falls, Quebec.
The company produces the first aluminum ever on Canadian soil.
This Canadian division is renamed the Northern Aluminum Company
New Uses & WW1
The Wright brothers use aluminum in their first plane at Kitty Hawk, North Carolina.
The first Model T rolls off the assembly line, and steel is a primary component.
The U.S. and Canadian steel industries surround the Great Lakes region. At this point the U.S., produces more steel than any other country in the world.
The US passes the Underwood Tariff, a general reduction in tariff rates that affected Canadian exporters. Zero or near-zero tariffs were introduced for steel. (The Canadian Encylopedia)
At this point, 80% of American-made cars had aluminum crank and gear cases.
World War I
The Great War breaks out. It’s the first ever “modern war”, and metals become strategically important in a way like never before. For the first three years, the U.S. helps the Allies – including Canada – which is already at war, by providing supplies.
Steel was crucial for ships, railways, shells, submarines and airplanes. Meanwhile, aluminum was used in explosives, ammunition, and machine guns – and the Liberty V12 engine, which powered Allied planes, was 1/3 aluminum.
During this stretch, America produced three times as much steel as Germany and Austria. By the end of the war, military usage of aluminum is sucking up 90% of all North American production.
After the war, the interruption of European aluminum shipments to North America drives up Northern Aluminum sales to the United States. In 1919, U.S. aluminum imports from Northern Aluminum totals 5,643 tons, while all European producers add up to 2,360 tons.
After aluminum gains post-war acceptance from consumers, Alcoa uses this new momentum to strike a deal to build one of the world’s greatest aluminum complexes in Quebec on the Saguenay River.
These facilities become the base for Northern Aluminum, which changes its name to the Aluminum Company of Canada (Alcan). By 1927, the area includes an entire new company town (Arvida), a 27,000 ton smelter, and a hydro power plant. This complex would eventually become the world’s largest aluminum production site for WWII.
The “Roaring Twenties” saw consumer culture take off, with autos and appliances flying off the shelves. Steel and aluminum demand continues to soar.
World War II
Canada and the U.S. establish the Permanent Joint Board on Defense, still in operation today. Near the same time, the Canadian-American defense industrial alliance, known as the Defense Production Sharing Program, is also established.
Canada and the U.S. agree to coordinate production of war materials to reduce duplication, and to allow each country to specialize, with The Hyde Park Declaration of 1941.
The principles of this declaration recognize North America as a single, integrated defense industrial base.
Canada builds the Bagotville airbase to protect the aluminum complex and hydro plants of the Saguenay region, which were crucial in supplying American and Canadian forces. A Hawker Hurricane squadron is permanently stationed, to protect the area.
The Saguenay facilities were so prolific that Canada supplied 40% of the Allies’ total aluminum production.
“The record proves that in peaceful commerce the combined efforts of our countries can produce outstanding results. Our trade with each other is far greater than that of any other two nations on earth.” – Harry Truman, 33rd U.S. President, 1947
Cold War & North American Integration
The U.S. focuses on Canadian resources after the President’s Materials Policy Commission warns of future shortages of various metals, which could make the U.S. dependent on insecure foreign sources during times of conflict.
Canada and the U.S. sign the Defense Production Sharing Agreement, which aims to maintain a balance in trade for defense products. At this point, Canada relies on the U.S. for military technology – and the U.S. relies on Canada for important military inputs.
The St. Lawrence Seaway opens, providing ocean-going vessels access to Canadian and U.S. ports on the Great Lakes. This facilitates the shipping of iron ore, steel, and aluminum.
The Canada-U.S. Auto Pact allows for the integration of the Canadian and US auto industries in a shared North American market. This paves the way for iron ore, steel, and aluminum trade.
The U.S. and Canada sign a free trade agreement, which eventually gets rolled into NAFTA in 1994.
Modern Aluminum and Steel Trade
U.S. Steel buys the Steel Company of Canada (Stelco) for $1.9 billion
The U.S. and Canada are each other’s best international customer for a variety of goods – including steel and aluminum.
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