President Trump touts his ability to attract billions of dollars in investment to bring manufacturing back to the U.S.
But getting the projects up and running will mean clearing many of the same hurdles that drove heavy industry out of the U.S. Workers are hard to find. Wages in the U.S. are high. Pricing is uncompetitive. Customers have moved on, and space is tight.
In Philadelphia, a $5 billion shipyard project needs more space for shipbuilding, and has challenges attracting more customers beyond its owner, Korean company Hanwha Shipping. In Iowa, a company with an unproven record in the U.S. steel industry is developing what will be one of the largest and most expensive steel mills in the country.
The two projects are part of Trump's push to revive old-line industries in iron-ore mining, steel production and East Coast shipbuilding. They check all the boxes for Trump: They are big, audacious, expensive and expand industries he sees as barometers for America's manufacturing and national security.
Administration officials consider both as proof that Trump's tariffs and diplomatic strategies to attract more foreign investment are working. Trump announced the Iowa steel-mill project last month in an Oval Office ceremony, praising the owner Mesabi Metallics' plan to invest $15 billion into a plant that will dwarf most existing U.S. steel mills of the same type.
Critics, including some Democrats, have said the Iowa project was pieced together quickly to aid Republicans in next month's midterm elections. Mesabi Metallics says that isn't the case.
Chief Executive Joe Broking said the company has long sought a way to use iron ore from its mine to make higher-value finished steel, rather than just selling the ore to someone else. That ore will allow the plant to produce a higher-quality steel than competitors that mostly rely on scrap-metal feedstock, Broking said.
"That gives us the ability to produce the highest quality steel that electric arc furnace producers have not been able to produce," he said.
The other project aims to boost commercial ship production at the historic Philadelphia Shipyard from two a year to 20. The yard has doubled its workforce to 2,500 over the past two years to handle the extra demand.
But the two projects have attracted doubts about the soundness of the business plans -- and drawn comparisons to other ambitious Trump plans that didn't pan out, like when Taiwan's Foxconn seemed set to produce high-definition screens at an enormous, $10-billion plant in Wisconsin. Supply-chain problems and high costs led the project to be significantly downsized. Part of the site was later converted to a data center.
In Philadelphia, the Hanwha investment is part of South Korea's commitment to support the U.S. shipbuilding industry through a $150 billion investment fund after talks last year between Trump and visiting South Korean President Lee Jae Myung. But no other Korean firms -- some of which build around 40 ships on average a year -- have shown interest in investing in U.S. shipbuilding.
The Philadelphia yard dates to the Revolutionary War. It armed the U.S. Navy for nearly two centuries until shipbuilding for the military stopped in the 1990s. Today, the yard builds private ships that operate in U.S. waters to comply with the federal Jones Act: Ships must be built, crewed, flagged and insured in the U.S. The requirements make the yard an expensive place to build.
The current order book beyond the Hanwha order consists of three containerships for Hawaii-based Matson Inc. at $330 million each. That is twice the price of a mega vessel built in South Korea or China.
"It's hard to justify a high valuation multiple for a U.S. shipbuilder like Philly from a foreign buyer, based on pure economics," said Basil Karatzas, head of consulting firm Karatzas Marine Advisors.
White House officials pointed to projects that they said arose from Trump initiatives during his first term, including an LG Electronics appliance factory in Tennessee and the expansion of a Denso auto parts plant, also in Tennessee, as proof that his policies are working.
"He has a proven record of securing historic investment, creating high-paying jobs, and bringing manufacturing back to the United States," a White House spokeswoman said.
In Iowa, the planned Mesabi mill will further drive Trump's goal of expanding U.S. steelmaking, which is up in recent years as tariffs squeeze out steel imports and drive up profits for domestic companies.
But incumbent steel companies were caught off guard by the size of Mesabi's plan to add up to 10 million tons of steel annually to the U.S. market, with initial production starting in 2030.
Building and operating a new steel mill from scratch will require Mesabi to find people with the technical and management know-how for a steel business it hasn't been in before, although its parent company, India's Essar Group, previously built and operated steel mills in India. Mesabi took nearly 20 years to complete its iron-ore mine in northern Minnesota, overcoming years of delays, missed deadlines and a bankruptcy.
Broking, the CEO, said he was confident the company could handle the steel-mill construction after finding its footing with the iron-ore mine. "It was not a small task to restart that project and to bring together over 2,000 contractors. We now have well over 250 full-time employees," Broking said. The Iowa mill will employ about 1,700 when completed.
The mill could become a victim of its own success as it increases the U.S. steel supply.
"You're going to have excess production capacity, and that's going to create much more competition between mills to drive down prices, and that hurts profits," said Josh Spoores, an analyst for steel market forecaster CRU.
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