Iowa approves $1.36 billion in tax breaks for Trump’s steel plant

The Iowa House of Representatives approved on Friday by 75–17 the bill House File 2801, which updates the state MEGA tax incentive programme, paving the way for an incentive package of up to $1.36 billion for the new $15 billion steel plant that the company Mesabi Metallics plans to build in Lee County, in southeastern Iowa, according to the Des Moines Register.

President Donald Trump had announced the project only a few days earlier, at a ceremony in the Oval Office on September 28, describing the plant as the largest in U.S. history: 6,000 jobs during construction and 1,750 permanent jobs, with steel production expected to start in 2030.

The $1.36 billion package — $1.145 billion in investment tax credits (10% of the capital investment), $154.35 million in sales tax refunds and $60.5 million in withholding tax credits — would be the largest in the state’s history, according to the watchdog organisation Good Jobs First.

The morning debate in the special session had revealed reservations even within the majority’s ranks. Governor Kim Reynolds pushed the project hard, as the midterm elections approach in a state hit by tariffs and high diesel prices. House Democrats criticised the lack of measures on the cost of living, while minority leader Brian Meyer called for strong oversight to protect taxpayers’ money.

The process was accompanied by political drama: Republican Senate leader Mike Klimesh removed two Republican senators, Jeff Taylor and Dawn Driscoll, from the Ways and Means tax committee, after they had warned they would vote against. Senator Dave Sires denounced the move as “dirty politics” — although Driscoll later clarified that she had left the committee herself.

The company Mesabi Metallics, owned by the Indian group Essar, comes with a troubled history in neighbouring Minnesota, where it went bankrupt in 2016 with debts of $1.1 billion. The bill now passes to the Iowa Senate, where the final vote is expected.