Forcing Americans to pay huge taxes on things they purchase from other countries hasn’t sparked the surge in domestic manufacturing that Trump said his tariffs would. So now we apparently need to pay foreign manufacturers to build factories in America.
Back in March, the United States promised India-based Essar Group $10 billion in easy financing to build a major iron mining and processing operation in Minnesota. Now the state of Iowa has rushed to approve $1.36 billion in tax breaks to lure Essar’s Mesabi Metallics to build its steel plant down in Lee County in the far southeast corner of the state.
Iowa apparently derives no worry from the fact that Essar/Mesabi is still repaying Minnesota for big corporate welfare that failed:
In 2008, Essar Steel Minnesota planned to build a taconite mine, a direct-reduction-grade iron ore pellet plant, and a steel mill in Minnesota, according to the Minnesota Department of Employment and Economic Development, known as DEED.
The company filed for bankruptcy in 2016 before completing the taconite plant. Court records showed it owed more than $1 billion.
The company emerged from bankruptcy in 2017 as Mesabi Metallics and remained under Essar Group’s ownership.
Mesabi Metallics is now repaying money it received from Minnesota for the earlier project. A Minnesota DEED spokesperson said the company has repaid about $49 million of what was originally a $65 million grant. With interest, the total amount due rose to about $71 million.
The company still owes approximately $21 million, according to Minnesota DEED, which also says Mesabi Metallics has made annual payments for the past six years.
A Mesabi Metallics spokesperson said the company has made every required payment on schedule and will continue to do so. The company also said that despite its previous delays and bankruptcy, it is now in a “strong financial position” [Kayla James, “What We Know About the Company Behind Proposed $15 Billion Iowa Steel Plant,” KCCI-TV Des Moines, 2026.10.01].
$65 million in Minnesota money wasn’t enough to get Essar to follow through on a big minerals project in Minnesota. Now Iowa is betting more than 20 times that amount on Essar’s reliability in Iowa.
Republican Senator Dan Dawson from Council Bluffs said on the floor of the Iowa Senate during its special corporate-welfare session that Republican Governor Kim Reynolds is giving Iowans a bad deal:
Dawson pointed out how taxpayers — regardless of where they live — will contribute toward the incentives for the steel plant.
“Is it fair that every county in Iowa has to chip in $14 million a piece, effectively, to pay for this project in one county?” he said.
He also questioned how giving one company so much tax credits is the right approach when numerous other existing companies employ far more than the promised 1,750 permanent jobs for the steel plant and get far fewer incentives from taxpayers.
“Is it fair that every other business corporation in the state that pays a tax rate that’s still ranked 25th in the United States overall for competitiveness to stay at that rate while we give a company incentive package where they won’t pay any taxes for over 10 years?” Dawson said.
He concluded his remarks by encouraging Iowans to support the constitutional amendment on the ballot this November that would require two-thirds of the house and senate in the future to raise income or corporate taxes rather than a simple majority of legislators.
“For all that is good to all the Iowans out there, vote yes, and protect yourselves from your government and the ramifications negotiated by this governor,” he concluded as he shoved the microphone on his desk away from him in apparent disgust [Dave Price, “Iowa GOP Senator: Gov. Reynolds Negotiated Bad Deal for Proposed $15 Billion Steel Plant,” KTIV-TV Sioux City, 2026.10.04].
Iowa will send $1.36 billion to Mumbai on the promise of maybe 1,750 permanent jobs around Keokuk when the steel mill maybe starts operations in 2030, an investment of $777K per maybe job. Iowa could hire 1,750 people right now at $78K per year and put them to work filling potholes, picking up trash, teaching kids, whatever, and could come out sooner with a more sustainable statewide economic boost.
But hey, there’s an election on, and Republicans evidently have to save their skins by masking their embarrassing economic performance with announcements of big handouts to everybody… including foreign corporations.
I’ve preached this for going on forty years. It takes trucks, tub grinders and balers dedicated to specific materials to recycle on a regional scale. The United States has thousands of mountains of glass cullet from the municipal waste stream just waiting to be repurposed. We sell millions of tons of salvage material to India and Asia to be recycled while tearing up our own ground mining for virgin minerals while metals and plastics, that could be petroleum, are buried in landfills.