Before Iowa Bets On a Steel Mill, First Think About Foxconn

A Wisconsin reader’s letter to the Des Moines Register this morning offers Iowans a timely reminder about Trump’s proposed $15 billion Iowa steel mill. As Wisconsin learned from a proposed Trump economic project there, a multibillion-dollar factory announcement, thousands of promised jobs and a presidential groundbreaking ceremony do not guarantee that a project will deliver.

In 2017, President Donald Trump and Wisconsin Governor Scott Walker celebrated plans for a $10 billion Foxconn manufacturing complex that was expected to create 13,000 jobs. Trump later described the project as the eighth wonder of the world. Four years later, the original project had largely collapsed. Foxconn renegotiated its agreement with Wisconsin, reducing its investment commitment to $672 million and its employment target to 1,454 jobs.

Now Iowa faces its own enormous manufacturing proposal: a $15 billion steel mill announced by Trump, with promises of at least 1,750 permanent jobs and thousands of construction positions. The projects are different. But Wisconsin’s experience raises questions Iowa should answer before committing substantial public resources.

Wisconsin’s Costly Lesson

Foxconn’s original agreement offered up to $2.85 billion in state tax credits, with additional local and infrastructure commitments bringing the potential public cost above $4 billion. When the company’s plans changed, Wisconsin renegotiated the agreement in 2021. The revised deal reduced potential state tax credits to $80 million and tied them to substantially lower investment and employment targets.

That renegotiation protected Wisconsin from paying the original state incentive package. But it could not undo the disruption experienced by residents whose properties were acquired or eliminate the substantial infrastructure spending already undertaken to accommodate the project.

The lesson is not that large manufacturing investments should be rejected. It is that taxpayers can incur substantial costs long before the promised factory begins producing anything.

Iowa’s Decision

Mesabi Metallics, owned by India’s Essar Group, proposes to build its steel mill in Lee County, using iron ore from its Minnesota operations. The company projects 1,750 permanent jobs, approximately 6,000 construction jobs and production beginning in 2030.

Governor Kim Reynolds has called a special legislative session for October 2 to amend Iowa’s Major Economic Growth Attraction (MEGA) program. The proposed changes would allow a refundable investment tax credit of up to 10% for a qualifying project, compared with the existing 5% maximum. On a fully qualifying $15 billion investment, that represents a potential $1.5 billion credit. Importantly, the proposed credit would not be paid until the facility enters service and at least half of the promised jobs have been created. That is a meaningful safeguard.

But Foxconn illustrates why lawmakers should examine the entire financial commitment, not just the conditions attached to one tax credit. Will Iowa or local governments be expected to finance roads, utilities, land acquisition or other infrastructure before the mill is operating? What happens if the company builds a smaller facility, delays production or creates substantially fewer jobs?

And if Commerce Secretary Howard Lutnick was correct when he said the steel mill deal was already done, why are additional state incentives necessary?

What Iowans Deserve to Know

Before committing public resources, Iowa officials should disclose the project’s financing arrangements, the full value of proposed state and local incentives, and the conditions that must be met before benefits are awarded.

They should also explain what happens if the project changes substantially after construction begins. Performance requirements, independent verification, enforceable repayment provisions and limits on advance public spending are particularly relevant lessons from Wisconsin.

A steel mill of the proposed scale could create significant employment and economic opportunities for southeastern Iowa. Mesabi’s existing Minnesota mining operations also distinguish its proposal from Foxconn’s original Wisconsin plan.

But neither those advantages nor a presidential announcement guarantees that the Iowa facility will be completed as proposed.

Wisconsin’s experience demonstrates why public officials need to distinguish projected economic benefits from enforceable commitments. And why taxpayers deserve to understand the financial risks before those commitments are made.

The question is not simply what Iowa stands to gain if the steel mill succeeds. It is what Iowans could lose if it doesn’t.