$500 Million Steel Grant Threatened Amidst Shifting Priorities for US Manufacturing
On April 9, 2025, news broke that a $500 million federal grant intended to upgrade the Cleveland-Cliffs Middletown Works in Ohio—one of the country's last remaining major steel manufacturers—is at risk due to the Trump administration’s ongoing cuts to various manufacturing programs. The grant, awarded during the Biden administration, was part of a broader effort to modernize the steel industry with more sustainable technologies, including hydrogen, natural gas, and electricity-powered blast furnaces, replacing traditional coal-based systems.
The project was expected to create over 100 permanent jobs and 1,200 construction jobs in Middletown alone, an industrial town in Ohio that has long been a hub for steel production. However, internal documents obtained by CNN reveal that under the new government strategy, significant cuts to manufacturing-related grants—including the Cleveland-Cliffs project—are imminent.
A Setback for the Steel Industry and US Manufacturing
Cleveland-Cliffs, one of the largest vertically integrated steel producers in the United States, had secured funding to extend the life of its Middletown Works plant and transition to climate-friendly practices. The plant’s modernization was seen as crucial for both economic and environmental reasons, offering a pathway for the steel industry to reduce its carbon footprint while ensuring the long-term viability of US steel production.
However, with the Trump administration’s push for fiscal restraint and efficiency in government spending, these grants are now on the chopping block. Critics argue that cutting such programs contradicts the administration's supposed support for US manufacturing and job creation.
“There’s no political logic to it whatsoever,” said a source familiar with the situation, who pointed out that Cleveland-Cliffs is an important player in Vice President JD Vance’s hometown and a vocal supporter of Trump’s tariffs on steel. “Cliffs is the major vertically integrated steel manufacturer left in this country, and they’ve been quite supportive of Trump’s tariffs.”
Potential Economic Impact on Ohio and the Steel Industry
The potential loss of the $500 million grant is devastating for Middletown’s local economy. Shawn Coffey, the president of the union representing more than 2,000 Cleveland-Cliffs workers, called the funding “huge,” stating that the grant would help modernize the facility and ensure jobs for future generations.
“Anytime you can upgrade a facility—getting environmentally friendlier—that extends the life of the mill,” Coffey explained. “It’s for the future of my kids, grandkids.”
If the grant is rescinded, Coffey warned that the company might decide to shoulder the project’s cost alone, a decision that could impact the creation of 170 permanent jobs in the next five years. Additionally, the company’s ability to upgrade and stay competitive could be hampered, potentially jeopardizing the long-term future of the Middletown Works plant.
Energy Department Review and Uncertainty
Despite the growing concerns, the Energy Department has yet to make a final decision about the future of the grants. Ben Dietderich, an Energy Department spokesperson, stated that no conclusive choices have been made regarding which programs will be cut, and multiple options are still under review. However, the freeze on billions of dollars in Biden-era grants, including the $6.3 billion fund meant to modernize industrial facilities like Cleveland-Cliffs, has led to widespread uncertainty.
The review process, coupled with a directive not to communicate with companies about the future of their grants, has caused frustration among stakeholders. Many projects that were already in the planning stages have been halted, and companies are now left unsure about the funding they were promised.
“It was almost like an on-off switch,” said a former employee of the Department of Energy’s Office of Clean Energy Demonstrations (OCED), which oversees the program. “You can’t say you’re supporting manufacturing and then do things that prevent that manufacturing from coming in.”
Climate-Friendly Steel: A Priority for the Biden Administration
Under the Biden administration, grants like the one awarded to Cleveland-Cliffs were seen as part of a broader push to modernize America’s industrial base, reduce emissions, and make US steel more competitive on the global market. By investing in climate-friendly technologies, the government aimed to help steel plants transition away from coal-based production, thus making steel manufacturing more environmentally sustainable.
“What we were trying to do with these kinds of programs was to strengthen US economic competitiveness and reshore manufacturing,” said Sameera Fazili, former deputy director of the National Economic Council under Biden. “Instead, the Trump administration has just had this slash-and-burn policy.”
Fazili and others argue that cutting these grants—especially in light of the uncertainty caused by Trump’s tariffs—could harm key US industries like steel, aluminum, and cement, which are already under strain from global competition and trade disputes.
“You can’t cut your way to economic competitiveness; you have to make strategic public investments,” Fazili added.
Political Ramifications and Ohio's Role in the Debate
The decision to freeze or eliminate the Cleveland-Cliffs grant has caused confusion, particularly since it affects one of the largest employers in Vice President JD Vance’s hometown. Local leaders, including Middletown’s vice mayor Steve West, are hopeful that Vance will advocate for the project, given its importance to the local economy and Ohio’s manufacturing base.
“We’re hopeful that the administration, especially having JD Vance from Middletown, will evaluate it closely and understand that U.S.-produced steel is one of the top priorities,” said Vice Mayor Steve West.
Despite the political context, the uncertainty surrounding federal manufacturing grants signals broader concerns about the direction of US industrial policy. Critics argue that cutting funding for modernization projects risks hindering long-term growth and competitiveness in the manufacturing sector.
Key Takeaways:
• $500 Million Grant at Risk: The $500 million grant intended for Cleveland-Cliffs to modernize its Middletown plant and transition to climate-friendly steel production is in jeopardy under the Trump administration’s cuts to manufacturing programs.
• Job Creation Threatened: The grant would have created over 100 permanent jobs and 1,200 construction jobs in Middletown, Ohio, while extending the life of the steel plant and introducing environmentally friendly technology.
• Energy Department Review: The Energy Department is reviewing billions of dollars in grants and has not yet decided which programs will be cut, leaving companies in uncertainty.
• Impact on US Steel Industry: The decision to cut funding for critical steel modernization projects risks undermining the competitiveness of the US steel industry, particularly in the face of global challenges and the ongoing effects of Trump’s tariff policies.
• Local and Political Implications: The proposed cuts to Cleveland-Cliffs’ funding are particularly controversial in Ohio, where the company is a major employer, and local leaders hope Vice President JD Vance will intervene to support the grant.
• Climate-Friendly Technologies: The Biden administration had prioritized investing in climate-friendly technologies for the steel industry, with the goal of reducing emissions and making US manufacturing more sustainable and competitive.
• Economic Competitiveness at Risk: Critics argue that reducing funding for modernization projects could harm key US industries like steel, aluminum, and cement, which are essential for economic growth and job creation.
• Uncertainty in Manufacturing Policy: The freeze on federal grant programs has led to confusion and frustration among stakeholders, with companies unsure about the future of their funding and investment projects.
