Cleveland Cliffs, one of the largest steel manufacturers in the U.S., made headlines this month with surprising developments for West Virginia, particularly regarding their indefinite postponement of plans to open a new electrical transformer plant. This project was supposed to help recover around 600 jobs from the 1,000 losses incurred when the mill shut down in February. Unfortunately, this is just one of several disappointing announcements from the company since March, highlighting ongoing financial troubles. Cleveland Cliffs is planning to close six facilities that stretch across Pennsylvania and the Midwest.
The reality is, when it comes down to choices, some might say that Trump won’t hesitate if it means preventing the collapse of the U.S. steel industry through foreign investment. However, it’s the steel workers and their families who bear the brunt of these decisions. They often fade from the spotlight.
Having followed the decline of the steel industry for quite some time—first as a conservative adviser at the American Manufacturing Alliance and then in various economic roles—I see Cleveland Cliffs as a significant example of the ongoing struggles within the realm of U.S. steel production, which has been in trouble for years. This is not an issue that will be easily resolved.
Right now, steel producers face skyrocketing costs of raw materials, energy, and labor. It’s quite the juggling act, really, as they also contend with an influx of cheap steel from around the globe, especially from China. Plus, there are geopolitical tensions and supply chain issues adding more chaos to the mix. As a result, the industry is teetering on the edge, leaving workers in a lurch.
Some companies are trying to get creative to stay afloat. For instance, in December 2023, U.S. Steel made headlines with its proposal to be sold to Nippon Steel, a Japanese rival. Just months prior, they had warned that, without solid buyers, they’d have to shut the Mon Valley Works facility near Pittsburgh—an iconic plant employing over 3,000 workers—and potentially relocate their headquarters from “steel city” to Arkansas.
Now, it seems, Nippon Steel has emerged as the most promising bidder, surpassing others like Cleveland Cliffs, despite being overwhelmed by ongoing losses. But then, the Biden administration stepped in and blocked the deal. Interestingly, Trump initially shared concerns regarding the sale but has since shown a willingness to reconsider.
Personally, I’ve long been an advocate for improved trade policies, especially around deregulation and addressing issues with China. As a former commissioner on the U.S.-China Economic Security Review Board, I pushed for actions against intellectual property theft and economic manipulation. I believe Trump’s trade agenda might offer the best opportunity we’ve had in decades to safeguard jobs from exploitation and perhaps revitalize domestic manufacturing.
Looking ahead, we need to recognize that these policy changes won’t happen overnight. Manufacturers like U.S. Steel simply can’t afford to sit back and wait while they face neglect and potential collapse. Nippon Steel’s impressive bid of $14.9 billion could provide the necessary capital infusion to breathe new life into the beleaguered industry.
Indeed, Nippon Steel’s recent offer—valued at $20 billion—includes commitments to modernize U.S. steel plants and maintain the steel workforce while honoring current union contracts. Each U.S. steel employee could even receive a $5,000 bonus post-transaction.
Trump possesses a solid understanding of businesses and negotiations. His priorities revolve around revitalizing American industry and fostering job creation, which will ultimately help stabilize essential needs like food prices for steelworkers.
At the end of the day, when faced with the choice between the complete collapse of U.S. steel and nurturing it back to health through foreign investment, Trump seems inclined to favor growth. And, who knows, maybe that’s the right call.
