“The Iron Range is back in business.”
President Donald Trump proclaimed the renaissance at a Minneapolis rally last October. “Tremendous jobs,” he crowed.
The president was correct, if by “tremendous” he meant jobs for precisely 200 more people. The Iron Range indeed has inched back from its nadir. But at a high — and unjustifiable — price to the nation. And, paradoxically, at a cost to the U.S. steel industry.
The month Trump declared the resurrection of the Iron Range, Minnesota employed 7,004 people in mining and logging, up from 6,804 in October 2018.
By way of comparison, state employment in the sector was nearly 500 higher in October 2014 — the peak for that month in the last decade.
Trump promised that trade wars were easy to win when he imposed tariffs on imported steel in March 2018. When the final 2019 numbers are in, production of iron ore pellets on the Iron Range actually is expected to show a small decline — to 37 million tons, down from 39.1 million tons in 2018, according to Minnesota Department of Revenue Minerals Tax Office estimates.
In 2018, boosters of the Iron Range were celebrating gains in jobs and production. Fair enough. But how much thought did they — or Trump, for that matter — give to a big contributor to the uptick? Iron ore exports were up 42% in the third quarter of that year. Who buys U.S. iron ore exports? Foreigners. Foreigners making steel, such as China.
A White House threat to expand tariffs on Chinese goods recently was lifted, at least for now. But Trump’s tax on steel imports from China and Europe — ultimately paid by U.S. consumers — remain on thousands of steel parts imported from China and Europe. Higher prices on consumer products contributed to falling demand. The result: the greatest slump in U.S. manufacturing in more than a decade.
In the steel industry, “the protection against imports [had] helped prompt United States producers to invest billions of dollars in new facilities that they hope will be more efficient,” the New York Times reported.
“But the price of steel plunged, in part as a result of lower demand from manufacturers, putting pressure on the steelmakers. In December, United States Steel said it was going to indefinitely idle most of a mill near Detroit. Some 1,500 workers from the facility got layoff notices. U.S. Steel also cut its capital spending forecast for this year, to $875 million from $950 million.”
Trump’s embrace of protectionism has cost more jobs in the steel industry than it has saved. And it’s cost American consumers and businesses more than $900,000 a year for every job spared.
For a couple of hundred more taconite workers finding work on the Iron Range, their paychecks doubtlessly are welcome. For the rest of us, those jobs came at a high price.