Here’s a note to a long-time correspondent.
Mr. McKinney:
Thanks for sharing the report on the Trump administration’s announcement of a new steel plant to be built in Iowa.
By now, you should know what I’ll say: If this plant is being built in response, not to government intervention, but rather to market signals, then it’s not – contrary to your claim – “evidence of the success of our president’s tariffs.” But if this plant is being built because of government intervention, then while the administration can correctly credit Trump’s interventions for the plant, the administration cannot credibly claim that this plant will be a net benefit to Americans.
The workers and other resources used to build and operate this plant have alternative uses, which are sacrificed if the plant is built and operated. This steel plant will reduce American production in other sectors. Mr. Trump wishes us to believe that the value of the plant is greater than the value of the outputs forgone elsewhere in the economy, but he has no way to know that this wish is warranted. Insofar as the plant is built and operated as a result of government overriding market signals, the best bet is that the plant will be a net drain on Americans’ wealth.
One more point. I was struck by this comment by Rep. Mariannette Miller-Meeks (R-IA) at the White House announcement of the steel mill: “For too long, Iowa families have watched their jobs shipped overseas and their communities hollowed out. Not anymore.”
Since 1997 (the earliest date for which I can find data), manufacturing output in Iowa has risen fairly steadily. It reached its peak in 2024, when it was 51% higher than in 1997 and 45% higher than in 2001 (the year China joined the World Trade Organization). (Manufacturing output in Iowa was down slightly in 2025, quite likely because of Trump’s tariffs.)
Over these same years, Iowans’ real median household income also rose. It peaked in 2018 (the first year of Trump’s tariffs) at $86,600 (in 2025 dollars), and in 2024 was slightly less (at $86,450). In 2024, Iowans’ real median household income was 36% higher than in 1997 and 23% higher than in 2001.
Where’s the evidence for the “hollowing out” of American manufacturing and income? To justify their schemes, protectionists incessantly prattle on about this “hollowing out,” but it’s a myth.
Sincerely,
Don
