Dive Brief:
- Cleveland-Cliffs is laying off workers in Michigan and Minnesota as the steelmaker attempts to mitigate the knock-on effects of the Trump administration's tariffs on steel and auto imports.
- The company plans to idle some operations at its Dearborn, Michigan, plant due to falling automotive demand, leading to 600 job cuts, according to an emailed company statement. Cleveland-Cliffs will also idle operations at two iron ore mines in Minnesota, resulting in 630 layoffs.
- "These actions will allow the company to operate more efficiently and in a more cost competitive way for the current market environment," the company said in its statement. "We believe that, once President Trump’s policies take full effect and automotive production is re-shored, we should be able to resume steel production at Dearborn Works."
Dive Insight:
Steelmakers across North America are straining to address the impact of the Trump administration's sweeping tariffs.
In February, Canadian steelmaker Canada Metal Processing Group announced that "in light of lower anticipated demand and production volume, due to U.S. tariff threats and trade challenges in Canada with increasing imports," it plans to lay off 140 employees in Ontario and Quebec.
Marty Warren, national director of the United Steelworkers union, which covers members in the U.S. and Canada, said in a March 26 Reuters report that he has heard that at least 200 members have already lost their jobs.
Experts have been cautious about the positive impact of steel tariffs on U.S. manufacturing, saying that while new duties are likely to drive up domestic steel prices and production capacity, they are unlikely to create many new jobs.
Despite the recent layoffs, Cleveland-Cliffs and other top U.S. steelmakers have been vocal in their support of the tariffs and pushed for the administration not to include any exemptions to the tax, unlike when similar tariffs were imposed in 2018.
"The tariffs will penalize the foreign competitors who have been playing by a different set of rules while strengthening the domestic producers who actually invest in American workers, American manufacturing and American supply chains," Cleveland-Cliffs Chairman, President and CEO Lourenco Goncalves said in a Feb. 25 earnings call.
Competitor Nucor has been similarly vocal in its support, despite the fact that the company has some operations in Mexico through a joint venture with Japan-based steel manufacturer JFE Steel. The joint venture produces hot-dip galvanized sheet steel for automotive customers.
"We supply high value-added products into Mexico versus the commodity that's imported into the U.S. from Mexico," Nucor EVP of Raw Materials Noah Hanners said on a Jan. 28 earnings call.
