Major steel project in JD Vance’s hometown on a list of Trump cuts to manufacturing industry

By Ella Nilsen, CNN

(CNN) — The centerpiece of President Donald Trump’s America-first economic agenda is reinvigorating the manufacturing industry. But his administration is planning to slash a key program that invests in some of the biggest manufacturing industries in the US, including in Vice President JD Vance’s hometown in the heart of the Rust Belt.

A $500 million grant from the Biden administration was slated for steel giant Cleveland-Cliffs in Middletown, Ohio — to help the company upgrade its aging blast furnaces. Another $75 million was awarded to the company for a similar project in Pennsylvania.

The new furnaces — which run on climate-friendly hydrogen, natural gas and electricity instead of coal — would have extended the life of the plant and given the steel company a foot in the future.

But those grants, which would have created over 100 permanent jobs and 1,200 construction jobs in Middletown alone, are slated for termination under the Trump administration, according to internal administration documents obtained by CNN.

Representatives from the Department of Government Efficiency have been involved in deciding programs to cut and keep, two people familiar with the situation told CNN.

“An unelected billionaire who made his vast fortune off government contracts should not be able to unilaterally stop these programs,” Democratic Rep. Marcy Kaptur of Ohio, told CNN in a statement, referring to Elon Musk, whose efficiency department has worked to slash programs and budgets across the federal government.

Energy Department spokesperson Ben Dietderich said in a statement that “no final decisions have been made” about whether the funding would ultimately be cut, and that “multiple plans are still being considered.”

The Energy Department has frozen billions of Biden-era, congressionally appropriated grant programs for months while it reviews them and decides which ones to cut. The department’s $6.3 billion program that gave money to Cleveland-Cliffs and other big industrial companies to modernize their equipment could be cut by two-thirds, according to internal documents obtained by CNN.

Experts fear the cuts could have a chilling effect on America’s manufacturing industry, especially as the global economy reels from Trump’s tariff war. Trump’s tariffs, which were meant to be a boon to manufacturing, could be painful in the short term as they roil markets, stoke recession fears and seize supply chains.

Some projects have been spared, including $500 million awarded to aluminum company Century Aluminum to build a new and more efficient smelter – the first new smelter built in the nation in decades.

The haphazard cuts to major projects in red states like Ohio baffled some stakeholders.

One source told CNN it “makes zero sense” to cut a major federal grant to one of the largest employers in the vice president’s hometown.

“There’s no political logic to it whatsoever,” the source said. “Cliffs is the major vertically integrated steel manufacturer left in this country, and they’ve been quite supportive of Trump’s tariffs. This really reads like a bunch of 24-year-olds at DOGE are working through this.”

Shawn Coffey, president of the union representing more than 2,000 Cleveland-Cliffs Middletown workers, called grant funding “huge.”

“Anytime you can upgrade a facility — getting environmentally friendlier — that extends the life of the mill,” said Coffey, who leads the International Association of Machinists Local 1943. “It’s for the future of my kids, grandkids.”

If that funding is taken away, Coffey said it would be up to the company on whether or not to shoulder the cost of the project alone. Cleveland-Cliffs did not respond to CNN’s request for comment on the funding.

“If they decide not to go through with it, that’s 170 jobs we won’t be getting in the next five years,” Coffey said. “Does it change the outlook of Middletown works? It depends on what the future holds. We’ll regroup and continue to make steel in Middletown the best we can.”

A former employee at DOE’s Office of Clean Energy Demonstrations, which oversees the $6.3 billion grant program among others, told CNN the Trump administration’s federal grants freeze disrupted early scoping work on dozens of projects selected under the Biden administration. Many projects that had received small amounts of funding to start construction planning suddenly had that funding shut off.

“It was almost like an on-off switch,” the former employee said.

Further complicating matters, DOE staffers were told not to communicate with companies about the future of their federal grants.

“The whole point of OCED and (the $6.3 billion grant program) is investing in companies and industries that haven’t been invested in for decades – steel, cement,” the former employee said. “You can’t say you’re supporting manufacturing and then do things that prevent that manufacturing from coming in.”

The climate-friendly Biden administration saw the grants as a tool to get major industries to pollute less. But they saw other benefits too; namely, modernizing a key US industry and making it competitive for generations to come.

“What were we trying to do with these kinds of programs was to strengthen US economic competitiveness and reshore manufacturing, which aligns really well with the Trump administration and its energy abundance agenda, re-shoring manufacturing agenda,” said Sameera Fazili, who served as deputy director of the National Economic Council under Biden. “And instead, the Trump administration has just had this slash and burn policy.”

Fazili said pulling back on these grants, especially given the economic uncertainty caused by Trump’s tariffs, could severely damage bedrock US industries like steel, aluminum, and cement.

“You can’t cut your way to economic competitiveness; you have to make strategic public investments,” she said.

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