Tell me if you’ve heard this one before. China invests untold billions into an industry before selling the product overseas at less than cost. That lets China capture global markets while driving competition out of business.
You might think I’m talking about iron and steel, but today I’m talking about technology and renewable energy, fast-growing sectors of our economy both nationally and locally.
For places like the Mesabi Iron Range, or Rust Belt mill cities where iron ore becomes steel, foreign “dumping” wreaks periodic havoc in the steel market. Over the past several decades, local miners have been laid off because of strategic decisions made by foreign officials more than 6,000 miles away.
The U.S. response seeks to contain foreign supply in our marketplace, mostly through tariffs. Steel tariffs, for instance, have been used against China and other countries — sparingly by Presidents George W. Bush and Obama, and more robustly by Presidents Trump and Biden. These tariffs address the problem of dumping, but pass the costs to U.S. manufacturers.
So, what if the U.S. stopped being a goalie and started playing more offense?
It might look something like the historic growth of the solar energy sector, which includes a successful, fast-growing company right here on the Iron Range.
“We’re seeing the largest investment in U.S. energy infrastructure since World War II,” said Nick Hylla, executive director of the Midwest Renewable Energy Association. “There’s more investment planned for the next ten years than we’ve seen in the last 30.”
Over the past year, Heliene, Inc., doubled production of solar photovoltaic modules at its plant in Mountain Iron, expanding its workforce to about 350. Most jobs start at $21 an hour and do not require college degrees. The company now explores further expansion in Minnesota, though probably in the Twin Cities because of the available specialized rental space.
Heliene CEO Martin Pochtaruk said this growth is only possible because of “Buy American” provisions in the Inflation Reduction Act of 2022. The United States is taking new solar panel production directly out of the hide of Chinese factories while creating new jobs here.
This month, Heliene announced a strategic partnership with Georgia-based solar cell manufacturer Suniva, Inc. The alliance will will combine components made by the two companies, making Heliene crystalline solar modules the first to also include American-made solar cells.
Like the expansion both companies enjoyed under the Infrastructure Reduction Act, this new move again capitalizes on tax credits that incentivize American-made goods.
Reactions to news like this often boil down to short-sighted political squabbles. But what this actually represents is something the U.S. has needed for a long time: the makings of an industrial policy. We’ve never properly addressed the utter collapse of American industrial employment over the past 50 years.
China doesn’t pursue a strategy of dumping because of American concerns. Rather, it’s trying to solve a complex economic situation within its own borders. Their industrial strategy caters to their people in their system. You might cite China as an authoritarian country, but America can do the same through democratic means. We must only overcome the outsized power of the market.
Free markets are a powerful and often useful force, but a market is not a friend. Relying on markets is certainly no substitute for a viable U.S. industrial policy. Just consider how well American companies have fared since President Reagan went all-in on a market-based strategy 40 years ago, an approach that prevails to this day.
We now see clear evidence that a more assertive U.S. industrial policy generates demand for American goods while creating good jobs. It’s happening as we speak. Now, we might have to pay more. We also need to ensure that American companies don’t hoard their newfound wealth and that a fair portion of it goes to workers and communities. But if we’re willing to hold this line, it works to the advantage of everyday Americans, especially in rural and industrial places like ours.
America can dominate green energy and oil production alike. The U.S. could accelerate a transition into cleaner value-added iron ore and steel products. This country can make more things and innovate. We’ve got the economy. We’ve got the resources. Do we have the will?
In other words, let’s stop whining about China and start beating them. The U.S. is better positioned to compete than most of us seem willing to acknowledge. The Iron Range need not be excluded from the tumultuous but inevitable economic change happening around the world. We, too, can lead rather than follow.
Aaron J. Brown is an author and college instructor from northern Minnesota’s Iron Range. He writes the blog MinnesotaBrown.com and co-hosts the podcast “Power in the Wilderness” on Northern Community Radio. This piece first appeared in the Saturday, April 13, 2024 edition of the Mesabi Tribune.
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