Steelworkers considered this county 'too rural' to live there; local officials launched a plan to get them to put down roots

Mississippi County Courthouse, 
Osceola, Ark. (Wikipedia photo)

When U.S. Steel decided to make Mississippi County, Ark., its home base, local officials thought people would move to the area, bringing their spouses and families with them. They didn't. But the county didn't give up on leveraging its steel boom as way to address ongoing decline. 

"In recent years, this vast county in the Mississippi Delta has transformed itself into one of the largest U.S. hubs for steel production and reliable, well-paying steel work," reports Chao Deng of The Wall Street Journal. "Lately, it has shifted to an even harder task: getting those workers to move there."

Mississippi County was once a bustling farm region, but over several decades, families have left, and towns have fallen into decay. "Many steelworkers still see the county as too remote and rural to live in, so they choose to commute long distances every day, often from neighboring states," Deng explains. 

To get steelworkers and their families to move to Mississippi County, the county is "pushing a host of initiatives to increase its population and shore up its economic base," Deng writes. "The chief program, called 'Work Here. Live Here,' offers home buyers money toward down payments on new or existing property, as long as they live and work in the county for four years. . . . About 160 families have purchased homes with help from it."

Mississippi County location in Ark.
(Wikipedia map)

So far, the county's plan has been successful. Cliff Chitwood, the county’s economic-development officer, said about "250 new homes have gone up in the county in the past 14 months, with more than half of them bought under the 'Work Here. Live Here' initiative," Deng writes. Chitwood told Deng, “It doesn’t sound like many until you realize it’s more than we had in 20 years."

The sale of U.S. Steel to Nippon Steel has politicians up in arms, but some workers think sale might save their jobs

Wikipedia map

The fear of foreign control and the possible loss of jobs has many U.S. politicians and United Steelworkers’ leaders stoking opposition against the sale of U.S. Steel to Japanese-based Nippon Steel, but many of the industry's workers see the sale differently.

"Outside Pittsburgh, in Monongahela River valley towns where steel is still made, some workers and officials say the rhetoric is disconnected from what is happening on the ground," report Kris Maher, Bob Tita and Aaron Zitner of The Wall Street Journal. "Some say fears of foreign ownership are overblown and that the deal with deep-pocketed Nippon Steel offers the best chance to keep steel industry jobs in the region, and communities from being erased."

The voices against the $14.1 billion sale are big names, including President Joe Biden, both presidential candidates and "all four senators from Pennsylvania and Ohio, including Sen. John Fetterman," the Journal reports. However, West Mifflin Mayor Chris Kelly told the Journal: "I would bet that none of the national politicians have seen what I’ve seen and have not talked to these local workers. . . . This is nothing but politics." West Mifflin's U.S. Steel mill employs about 800 workers.

Both sides have cranked up their lobbying machines. "Kelly and other local officials are asking Pennsylvania Gov. Josh Shapiro to get the Biden administration to hear their concerns. . . . A spokesman said the governor said his priority is protecting Pennsylvania workers," the Journal reports "Nippon Vice Chairman Takahiro Mori recently met with U.S. regulators. Ads running in Pittsburgh urge they 'keep steel jobs in steel city.'"

In Braddock, the Edgar Thomson plant "is among the world’s oldest mills, producing steel from liquid iron heated in blast furnaces. Active since 1875, it hums day and night," Maher, Tita and Zitner write.
"Braddock Mayor Delia Lennon-Winstead backs the deal and said presidential candidates who oppose it should provide another solution. 'Do they actually walk these streets and live in this area?” she said. 'Do they know the devastation of closing the mill, what it would do to this area?'"

90% of U.S. iron ore travels through the Soo Locks, and the system needs expensive upgrades

Map by Marine Cadastre, Army Corps of Engineers via 
The Wall Street Journal

It isn't just the mighty Mississippi River that moves U.S. commerce. A system of locks, known as the Soo Locks is also vital to trade, but the neglected system needs ongoing, long-term repairs.

"About 10,000 ships pass through the Soo Locks each year to bring iron ore, grain, limestone and other staples across the Great Lakes and Canada into the Midwest and beyond," reports Ken Thomas of The Wall Street Journal. "The navigational system allows large ships to bypass rapids below Lake Superior. . . . Every few decades, the locks were upgraded — until recently."

The pandemic gave Americans a first-hand look at the havoc supply chain disruptions can cause, helping projects like the Soo Locks repairs become a national priority. "Now, construction crews are working to complete a modernization of the locks," Thomas writes. "The question is whether the upgrades can get the funds they need in time." And while the Biden administration has increased funding, more will be needed through 2030 when the upgrades are slated for completion.

In 2015, a Department of Homeland Security study "found that the aging network serves shipping vessels carrying nearly 90% of the nation's iron ore, a critical component of the steel used to make cars and refrigerators," Thomas explains. "The study estimated that if it closed for an extended period, it would also disrupt steel production, cost millions of jobs, and reduce U.S. gross domestic product by $1.1 trillion. . . . John Walsh, the chief executive of the Michigan Manufacturers Association, said trade associations as well as congressional delegations from the Great Lakes states are working to keep the funding a priority.

"The locks are the only effective way to transport the raw materials because distributing iron ore and other supplies by trucks or trains would be cost-prohibitive. Supporters noted that 13 of 14 North American integrated steel mills are dependent upon the Soo Locks to transport iron ore from Minnesota and Michigan," Thomas adds. "The system is nearly as old as the U.S.: The first lock, about 40 feet long to handle canoes, was built on the St. Marys River in 1798 by the Northwest Fur Co. to enhance the fur trade."

Mining companies pivot from thermal coal as utilities seek other energy sources

With cheaper and greener energy sources widely available, American utilities are moving away from using coal to generate electricity. So, many mining companies are pivoting away from thermal coal.

For instance, "activist investors are urging Contura Energy Inc. to accelerate its plan to get out of mining thermal coal for power plants, to focus instead on the more lucrative type that’s used to make steel. And Arch Resources Inc. is seeking to shed its thermal assets to also concentrate on metallurgical coal, after an effort to shift them to a joint venture was blocked last week," Will Wade reports for Bloomberg.

"Thermal coal demand in the U.S. has been sliding steadily for years," Wade notes. "Power plants are expected to burn about 433 million tons this year, less than half of what they needed a decade ago, and down 20% from 2019, according to the U.S. Energy Information Administration. Meanwhile, global steel production, the driver for met coal demand, has been climbing steadily since April."

The Trump administration has gone to great lengths to keep thermal coal viable, as shown by documents that detail the administration's failed efforts to save the Navajo Generating Station in rural Arizona, the largest coal-burning power plant in the Western U.S., Eric Lipton reports for The New York Times.

Federal Reserve study finds Trump tariffs have backfired

"President Donald Trump’s strategy to use import tariffs to protect and boost U.S. manufacturers backfired and led to job losses and higher prices, according to a Federal Reserve study" released Dec. 23, Greg Robb reports for MarketWatch.

Over the past two years, Trump has imposed tariffs on imported goods from China in an effort to boost the U.S. manufacturing sector and protect it from what he deems unfair trade practices. And while the tariffs succeeded in reducing domestic competition in some industries, increasing input costs and retaliatory tariffs more than offset that benefit, Robb reports. 

"Tit-for-tat trade retaliation is an idea best relegated to the past, given the presence of globally interconnected supply chains, the Fed researchers found," Robb reports. "The top 10 manufacturing industries hit by foreign retaliatory tariffs were producers of: magnetic and optical media, leather goods, aluminum sheet, iron and steel, motor vehicles, household appliances, sawmills, audio and video equipment, pesticide, and computer equipment. The top ten industries hit by higher prices were: aluminum sheet, steel product, boilers, forging, primary aluminum production, secondary aluminum smelting, architectural metals, transportation equipment, general purpose machinery and household appliances."

U.S. farmers may get less aid than first estimated if trade agreement with Mexico and Canada mitigates losses

Farmers hurt by the trade war with China could get less than the U.S. Department of Agriculture's promised $12 billion because of the new trade deal with Canada and Mexico that replaces the North
American Free Trade Agreement, Humeyra Pamuk reports for Reuters.

USDA announced in August that the first $6 billion would include cash payments to farmers of soybeans, sorghum, corn, wheat, cotton, dairy and hogs. Regarding the second $6 billion installment, Agriculture Secretary Sonny Perdue told Reuters the department will be "recalculating along as we go" because the new agreement might lessen the financial pain felt by some farmers.

Pamuk notes, "American farmers have yet to see the full benefit of the new accord as an ongoing dispute over steel and aluminum tariffs mean they still face retaliatory measures when trading with Canada and Mexico. That agreement also does not address the harm as a result of the trade war."

Perdue told Reuters that the steel and aluminum tariffs were "instrumental" in pressuring Canada to negotiate the deal, but now that it has been signed, the tariffs' purpose has been served and he believes the three countries should return to a no-tariff policy on steel and aluminum.

Nail factory workers in Southeast Missouri are hurt by Trump's tariffs on steel, but they still support him

Employees at a rural nail factory say they were shocked last month when 60 of their co-workers were laid off because of new steel and aluminum tariffs, but despite more looming layoffs say they still support President Trump. "Across Poplar Bluff, a struggling town of 17,000 in a remote pocket of southeast Missouri, many residents are reluctant to criticize Trump as they grapple with the prospect that their community could be one of the trade war’s first casualties," Jenny Jarvie reports for the Los Angeles Times. Trump won 79 percent of the vote in Butler County.

Managers at Mid Continent Nail Corp. in Poplar Bluff have cut back employees' hours and say they may have to lay off another 200 workers in the coming weeks. But employee Jimmy Coffer, who voted for Trump because he wanted him to bring back manufacturing jobs, told Jarvie he supports the president: "In fact, I'd like to shake his hand. He's doing a great job."

Many other interviewees echoed Coffer's sentiments, saying they still believe Trump will bring back manufacturing jobs even if they lose theirs. Diane Brogdon, 54, said Trump is "looking at the big picture, and I understand that. But he's got to stop and look at the small towns around here that are really going to get hurt."

Some locals blamed the layoffs on the company for importing steel from Mexico instead of buying American. Others were hesitant to criticize Trump's policies, worried they'd be harassed on social media, and some worried that the news media was only looking to score points at the president's expense. One barber-shop customer, who declined to give his name to Jarvie, complained that the media "can't say anything nice about" Trump, and said "If Trump ran into a burning building to pull out children, they'd say he's hurting firefighters."

What's on the horizon for Mid Continent Nail? It could relocate to Mexico where it could buy steel and export finished nails back to the U.S. without tariffs, but company officials insist they're staying in Poplar Bluff, Jarvie reports.

Farmers urge suspension of tariffs on Mexico

More than 60 companies and organizations representing American dairy farmers and cheesemakers wrote an open letter to President Trump praising him for his efforts to halt Canadian dairy subsidies but asking that the administration roll back its new tariffs on Mexico "in light of that country’s constructive engagement in North American Free Trade Agreement negotiations and the harm that Mexico’s retaliatory tariffs will have on U.S. dairy’s trade with its largest and most reliable market," Morning Ag Clips reports. "The companies asked the administration to work collaboratively with Mexico and suspend the steel and aluminum tariffs on Mexican products until the negotiations for a modernized NAFTA have been concluded."

The U.S. is Mexico's biggest dairy supplier, with sales of nearly $400 million last year alone--almost one-quarter of U.S. dairy exports. That trade was duty-free, but Mexico recently added tariffs on American cheeses and other products, some of which will reach as high as 25 percent when they go into effect in July. That could hurt the nearly 3 million American jobs in the dairy industry and would also allow the European Union, which recently signed a bilateral free trade agreement with Mexico, to take some of American dairy products' market share.

"Our first four months of 2018 showed a strong expansion in the volume of U.S. dairy exports into Mexico," said Tom Vilsack, president and CEO of the U.S.Dairy Export Council and former Secretary of Agriculture. "But these tariffs have introduced uncertainty and concern. A renegotiated NAFTA 2.0 would go a long way toward restoring our industry’s momentum."

Steel and aluminum tariffs take effect for European Union, Mexico and Canada, sparking retaliatory tariffs

"President Trump on Thursday imposed tariffs on imported steel and aluminum from the European Union, Canada and Mexico, triggering immediate retaliation from U.S. allies and protests from American businesses and farmers," David Lynch, Josh Dawsey and Damian Paletta report for The Washington Post.

The European Union responded by saying it would follow through on threats to impose tariffs on American-made products from politically strategic areas, like bourbon from Senate Majority Leader Mitch McConnell's home state of Kentucky and Harley-Davidson motorcycles, which are popular in Europe. Mexico said it would impose tariffs on American pork bellies, apples, cranberries, grapes, some cheeses and types of steel. Canada said it would impose $12.8 billion in tariffs on American steel and aluminum, along with coffee, candy, quiche and pizza. Canada also rejected a U.S. ultimatum to renegotiate all North American trade deals every five years.

"Mexico's retaliatory tariffs target pork legs, apples, grapes and cheeses as well as steel - products from U.S. heartland states that supported Trump in the 2016 election," report Michael O'Boyle and Frank Jack Daniel of Reuters.

Economist Douglas Irwin, author of a history of U.S. trade policy since 1763, told the Post, "It’s more than highly unusual. It’s unprecedented to have gone after so many U.S. allies and trading partners, alienating them and forcing them to retaliate. It’s hard to see how the U.S. is going to come out well from this whole exercise."

With the steel and aluminum tariffs looming, some businesses with government protection have added jobs, but other industries such as chemical manufacturers, brewers, footwear makers and auto manufacturers say the jobs lost because of the tariffs will outweigh the jobs saved or created.

"This is dumb. Europe, Canada and Mexico are not China, and you don’t treat allies the same way you treat opponents," Sen. Ben Sasse (R-Neb.) said. "We’ve been down this road before — blanket protectionism is a big part of why America had a Great Depression. 'Make America Great Again' shouldn’t mean 'Make America 1929 Again'."

Rural Iowans worry Trump's tariffs and China response will hurt farming, manufacturing, radio newsman says

Rural Iowans aren't paying much attention to whether President Trump had sex with a porn star or his ties to Russia, but they're paying close attention to what he's doing with the economy. If his policies hurt them, and the rest of rural America, Trump "and his legacy are in deep trouble," Robert Leonard, news director of KNIA-AM and KRLS-FM in Knoxville, Iowa, writes for The New York Times.

Iowa has a strong manufacturing industry, and many rural Iowans worry that Trump's steel and aluminum tariffs will hurt their businesses by driving costs up. Leonard reports, "One smaller manufacturer – a Trump voter – told me that his costs to produce his product nearly doubled overnight, and that his business has already been hurt by the tariffs. Prices didn’t rise only after the tariffs were announced; they started rising when Mr. Trump floated the idea."

Farm interests have been on high alert about Trump's trade policies for a while. The Iowa Soybean Association said the steel and aluminum tariffs pose "an immediate and grave threat" to their industry and Iowa agriculture. China has responded to the tariffs with retaliatory tariffs on pork and other products. Iowa is the nation's largest pork producer.

Republican Iowa Rep. Steve King, a Trump supporter, says he opposes the president's tariffs and worries they could help trigger a farm crisis like the one in the 1980's, which put 10,000 Iowa farms out of operation. "Dairy farmers are particularly hard hit, suffering through four years of declining prices. It’s gotten so bad, dairy farming organizations are giving out suicide hotline numbers, as farmers are committing suicide in the hope that their insurance will save the family farm," Leonard reports.

Though rural America voted overwhelmingly for Trump, his standing is precarious, Leonard writes: "With the multiple scandals, rampant corruption and the Mueller investigation, the only thing keeping him near 40 percent approval — and most important, approval among most Republicans — is a strong economy. That, and Fox [News] cheerleading. If the rural economy turns sour, much of rural America will abandon Mr. Trump, and Fox may have no choice but to follow."

Steel tariff loophole triggers layoffs at last U.S. keg maker

American Keg Co. photo

The last U.S. manufacturer of steel beer kegs, located in Pottstown, Pa. (pop. 22,377), has laid off one-third of its workers because of President Trump's new tariffs on steel and aluminum, Lizzie O'Leary reports for Marketplace.

The main problem, according to American Keg Co. CEO Paul Czachor, is that the tariffs only cover raw materials and not finished products. That means imported kegs cost about $95 and domestic kegs about $115. The company has a loyal customer base that wants to buy American-made products, even if they're more expensive, but "they're only going to go so far as that price difference continues to rise," he told O'Leary. That will likely happen as domestic steel companies raise prices, secure in the knowledge that they're undercutting the artificially inflated costs of foreign steel. The tariffs will not take effect until March 23, but the price of domestic steel jumped 4 percent on March 8, the day Trump signed the orders, and continues to rise as American steel makers anticipate the effects of the tariffs.

"I think when the tariffs came out, it was probably a good idea," Czachor told O'Leary. "I'm sure the steel industry needs some protection but there are some unintended consequences for companies such as us that have competition that make imports." If Czachor could talk to Trump, he says, he would encourage steel tariffs that include finished products.

Special congressional election in Pennsylvania is a possible litmus test for blue-collar union voters' allegiance

Today's special election for a congressional seat in southwestern Pennsylvania is an "acid test for the allegiance of working-class voters," Trip Gabriel reports for The New York Times. Union leadership is backing Democrat Conor Lamb, but it's unclear if the rank-and-file union members in the district, who care more about social issues and voted heavily for Trump in 2016, will follow their lead.

Conor Lamb, state Rep. Rick Saccone

Because of this possible symbolism, months before the midterm elections, both Republican political committees and small-donor Democrats from all over the country have poured millions of dollars into the race. Democrats want to shore up the narrative of a "blue wave" of rising anti-Trump and anti-Republican sentiment, and Republicans want to prove that Trump's connection with blue-collar workers is solid.

President Trump and Donald Trump Jr. have appeared at recent rallies for Saccone, and this morning the president tweeted: "The Economy is raging, at an all time high, and is set to get even better. Jobs and wages up. Vote for Rick Saccone and keep it going," the Observer-Reporter in Washington, Pa., reports. Cecil Roberts, president of the United Mine Workers of America and a member of the AFL-CIO's executive council, pitched Lamb to union workers as a "God-fearing, union-supporting, gun-owning, job-protecting, pension-defending Democrat" in a recent speech, Brent Scher reports for the Washington Free Beacon.

A Monmouth University poll found that 51 percent of voters polled said they support Lamb, compared to 45 percent for Saccone; that's nearly a 10-percentage point swing over last month's poll, in which Saccone had a small edge. Poll director Patrick Murray said, "This district has voted overwhelmingly Republican in recent elections, but a large number of these voters have blue-collar Democratic roots. Lamb seems to have connected with them."

The poll was unclear about whether Trump's steel tariffs, which could help Saccone, had much effect on the race. Click here for updates on the race throughout the day from the Observer-Reporter.