Iron Range layoffs show human cost, long-term implications of arbitrary tariffs

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The news billowed across the Mesabi Iron Range like an ominous fog.

Layoffs at the mines.

Six hundred and thirty, in fact. Most of them will occur at the Cleveland-Cliffs Minorca mine in Virginia, which is idling indefinitely in less than two months. The rest fall at Hibbing Taconite, co-owned by Cliffs and U.S. Steel, which is dropping to one production line and halving its workforce.

With jobs like these, this is really about 630 families. Thanks to generous, hard-earned union contracts, these jobs pay between $60,000 and $100,000 a year, potentially more with overtime. They are the lifeblood of northern Minnesota’s economy.

The company describes the layoffs as temporary, but warned the United Steelworkers union that the furloughs might last more than six months. Unemployment benefits will cover 80% of a miner’s pay for that time but cannot last forever. The threat of a longer-term closure has people worried.

“It’s hard to plan for the future when you don’t have answers, and we don’t know how long,” said Al King, president of the Steelworkers local at Minorca, shortly after the announcement. “With the economy the way it is, there’s a chance this could be a little bit longer, especially with such an aggressive shutdown like this. The messaging of this being indefinite and just how quickly they want to idle this facility, it gives everyone pause.”

Last week, Cliffs also announced the summer idling of its steel works in Dearborn, Mich., a plant that specializes in automotive steel, another connection to the struggling auto industry.

“The auto industry is very sensitive to the economy,” said Gary Campbell, an economics professor at Michigan Tech University. He said automakers are currently laying off salaried workers as companies figure out how to navigate tariffs, trade concerns and dwindling consumer confidence.

“This climate of uncertainty is more of a concern than what the policies are,” said Campbell. “We don’t know what the policies are. When that happens, businesses don’t invest, and people don’t make purchases they can put off.”

We know that President Donald Trump announced tariffs against Canada and Mexico early in his term, before pulling some back, then adding others. China got hit, too, but less than our allies in Europe.

On Wednesday, Trump announced 25% tariffs on imported cars and car parts starting this week. The United Auto Workers union hailed the news, but car manufacturers are nervous. They surely wonder how to relocate global supply chains to the U.S. when even domestic cars usually include components made in Canada or Mexico. Changing this will take billions, and spending billions is a great way to lose your shirt on Wall Street, where investors want profits now.

The relationship between cars and steel is also complicated by technological change. Cars are still mostly steel but contain far more aluminum and composite materials than ever before. These lighter materials cost less and improve fuel efficiency — and often come from other countries: especially aluminum, made from bauxite that typically comes from Canada.

Then there is the economic reality. Tariffs obviously raise the prices of things people buy from overseas, but as we saw during Trump’s first term, they also raise prices of domestic goods.

“The protected industry will raise their prices up to the tariff price,” said Campbell. “The domestic price will go up because it can. I remember when that was the case when they protected steel in 1980s. It made it more expensive for everybody.”

The only way that won’t happen, Campbell said, is if people stop buying cars, forcing the companies to reduce prices. But that would happen only in the event of a major downturn in the economy, a prospect that would cause more harm than good. This is especially true for working people who don’t have recession-proof fortunes in the bank. The miner, yes, but also the waitress and pizza delivery driver who get hit by lost business.

These matters are complicated. Cliffs acquired Minorca with its acquisition of ArcelorMittal USA in 2020, which likely put it over capacity on ore production. Hibbing Taconite is running out of ore. The slower pace of production will help Cliffs weigh more options. These layoffs buy the company time to decide.

But mining begins and ends with demand. Lower demand for key products will hit the entire steel industry eventually. Most people just can’t afford the prices they’ll be asked to pay.

According to statements from MAGA politicians and Cliffs, we simply need to remain patient. “Reshoring” of all components in domestic automotive production will happen soon, eliminating the need for foreign trade and rendering tariffs moot.

But what will that actually look like? We don’t have to wonder.

In recent weeks, South Korean carmaker Hyundai announced a massive $7.6 billion expansion to its electric vehicle plant in Georgia and a corresponding $5.8 billion new steel mill in Louisiana. These are enormous projects, welcome to be sure, but forgive me for some cynicism.

These plants are non-union, and Hyundai is building them hoping to get on the list of companies excused from tariffs. Cliffs, likewise, wants a seat at Trump’s table to figure out how to protect its $2.8 billion purchase of Canada’s Stelco last year.

But what about the legacy plants, the high-paying union jobs, and the natural resources of the North? There’s work to do here to preserve jobs and create new opportunities. Something so important and far-reaching requires steady policy and specific goals.

Those are nowhere to be found.

What we get instead is a president who declares tariffs, pulls some back, and then makes a list of loopholes tailored for friendly companies whose good will is clearly coerced.

This is not capitalism. It’s neither free trade nor fair trade. It’s crony chaos. None of this will protect or create jobs in iron, steel or any other important American industry. It will only raise prices for cars, appliances and everything else Americans need. That will mean more layoffs, corporate consolidation and news cycles that leave a pit in the collective stomach of every working family.

The emotional impact of moments like these follows people for the rest of their lives. I know. My dad lost his job during a localized Iron Range depression of the 1980s. I helped LTV miners write resumes after their mine closed in 2001. You never forget your parents crying, the occasional shouting, or the deafening silence of weeks that stack up like empties.

Yes, the Iron Range pulls together during hard times. But this time feels different. Due to technological change and short-term thinking in corporate boardrooms and the White House, Iron Rangers are apt to wake up in a few years with fewer mines, fewer jobs and little to show for their tireless contribution to American industry.

Current policy rewards rich political supplicants and union-busters while sandbagging the people who actually make America great. It’s time to turn that around.