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Blocking the U.S. Steel Deal: Biden’s Irresponsible Gamble with American Jobs and Global Competitiveness

Posted on Friday, September 13, 2024
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by Outside Contributor
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24 Comments
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President Joe Biden’s shortsighted plan to block the sale of U.S. Steel to Japan’s Nippon Steel puts politics above the long-term interests of steel workers, Pennsylvanians and United States national interest.  By opposing the $14.9 billion acquisition, the Biden administration also risks straining our important relationship with Japan, while making it easier for China to strengthen its grip on the global steel industry, a sector vital to both our economy and national security.  

The opposition to the deal is driven purely by political motivations.  Stated simply, the United Steelworkers union, a powerful political force in Pennsylvania and other industrial states, opposes the Nippon Steel transaction in favor of a domestic bidder like Cleveland-Cliffs.  And with the 2024 election approaching, the Biden/Harris administration prioritizes union support over most other concerns, particularly in battleground states like Pennsylvania.  

That political maneuvering, however, comes at the expense of real, long-term economic growth and competitiveness.  

Nippon Steel has already pledged to invest an eye-popping $2.7 billion to modernize aging facilities in the Mon Valley and Gary, Indiana.  That substantial investment would not only upgrade U.S. Steel’s outdated existing infrastructure, but also help maintain thousands of well-paying union jobs that should be of foremost concern to the United Steelworkers.  

Without this deal, in contrast, U.S. Steel has warned that these plants could close, and the company might even move its headquarters out of Pittsburgh — a city synonymous with American steel.  Accordingly, the state of Pennsylvania – which remains home to some of U.S. Steel’s largest operations – also stands to benefit from Nippon Steel’s superior offer.

The union expresses concern about potential layoffs, which is understandable, but Nippon Steel has committed to keeping those jobs in place at least through 2026.  More importantly, the deal would allow U.S. Steel to stay competitive in an increasingly global market.  Without Nippon’s investment, U.S. Steel simply doesn’t have the resources to modernize its production facilities and keep up with international competitors.  Ultimately, that would end the jobs with which the union expresses such concern.  

Even more shamefully, the Biden/Harris administration’s opposition to the deal flows from partisan calculation than national security concern.  

First, Japan remains one of America’s closest, strongest and most trusted allies.  Indeed, the U.S. and Japan are bound by a mutual defense treaty, and Japan plays a key role in maintaining stability in the critical Indo-Pacific region.  Allowing Nippon Steel to acquire U.S. Steel would pose no national security threat, but blocking it on the basis of partisan self-interest would.  

More broadly, the Nippon Steel proposal would increase America’s ability to compete globally, particularly against China, which already dominates the steel market.  As just one illustration, China’s Baowu Group is the world’s largest steel producer, and if U.S. Steel can’t modernize via the Nippon Steel proposal, it risks falling even further behind.  The combined forces of U.S. Steel and Nippon Steel would create the second-largest steel producer in the world, giving the U.S. and Japan a better position to compete with China.  

Accordingly, in today’s global economy, combining forces and building stronger commercial ties with allies like Japan are critical — not just for economic reasons but for national security as well.  

Blocking the deal, in contrast, sends the wrong message to both foreign investors and our global allies.  It suggests that some U.S. leaders are more concerned with short-term political gain than fostering long-term, mutually beneficial relationships.  At a time when geopolitical tensions are rising, we should be encouraging investment from trusted allies, not turning it away or jeopardizing it through the Biden/Harris administration’s political gamesmanship.

Simply put, the U.S. Steel/Nippon Steel proposal is beneficial for all parties about whom the Biden/Harris administration should care.  It would help preserve American jobs, modernize U.S. Steel’s facilities and strengthen the U.S.-Japan partnership, all while helping to counter China’s dominance in the steel industry.  

The Biden administration must reconsider its dangerous stance and allow the deal to move forward, putting the long-term interests of American workers and the economy ahead of short-term political considerations.

Timothy H. Lee is Senior Vice President of legal and public affairs at the Center for Individual Freedom.

Reprinted with Permission from CFIF.org – By Timothy H. Lee

The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.

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Max
Max
20 days ago

Remember that the goal is to bankrupt this nation any way possible and cause its downfall. Putting more people on handouts from the government will only seal their control over the populace.

Ted
Ted
20 days ago

First, get rid of the Union maybe the facility would have a chance at recovery. Unions have become Democrats in that they have out lived thier usefulness they are like a leech sucking the life blood out of everything they touch.
Second, why do we need foreign investors to revitalize an industry created in this country? Obama threw away billions of dollars on supposed industry with no returns in an effort to bankrupt this country. Get rid of the unions, get rid of those in charge that ruined the company and start fresh with help from the people of this country with responsible leadership. Remember the times when items used to say made in the USA meant something.

Gloria
Gloria
20 days ago

It is not irresponsible – it is Marxism.He has come to steal, kill and destroy. He was being guided one of the most corrupt = Obama.

anna hubert
anna hubert
20 days ago

Union might be concerned but membership will vote for him .Labor is an idiot who thinks that Dems. are a Santa Clause.

Dan Russell
Dan Russell
20 days ago

biden is a traitor. Cozying up to the Chinese so as to undermine our nation and manufacturing base.

Alaintha
Alaintha
20 days ago

The fact that the U.S. has sold itself off over the past 50 years is constantly a worry but in this case its the lesser of two evils…. Allowing China to confinscate our steel industry or allow Japan to assist in building our steel production. Indeed we are dire need of positive leadership with commitment to future output and posturing.

Steve Yparrea
Steve Yparrea
20 days ago

Wait for President Trump. He’s the one who can work it all out to MAKE AMERICA GREAT AGAIN

uncleferd
uncleferd
20 days ago

OF COURSE the debate was rigged. We all heard both moderators’ one-sided fact-checks, though they never checked facts whenever Harris said anything that was as wrong as the proverbial “football bat”.
President Trump could have prepared more thoroughly, but the fact of the moderators practically debating on behalf of Harris didn’t wear well.
What sounded worse were Harris’ out-of-context lies. The one abortion-related lie where she framed Trump as a woman abuser for supporting the Supreme Court decision on Roe v. Wade, which simply delegated legal responsibility to each state, was outrageous. The Supreme Court ruling was fair, and consistent with the constitution.
Harris is NOT fair. She still holds back on defining her own platform, but vilifies Trump despite his record as our President when we all were safe, our country was in much better financial state, and the USA’s business was mainly in order.
Since snake oil is not my taste, and Harris is scandalously trustworthy, I’ll stick with “The Donald”.

fred smith
fred smith
20 days ago

Biden has been wrong on everything he has ever attempted politically or otherwise and this situation if just one more! For the Union and Biden to try to hold on to US Steel is wrong because eventually, they will fail and all be out of work! If they take this offer, their plants would be refurbished and jobs prolonged rather than the inevitable.it’s a no-brainer, which is Biden’s nickname!

Misty
Misty
20 days ago

This is a huge reason that a career politician with a Marxist side kick should not be anywhere the White House. Hoping Nippon Steel can hold off on backing away from its offer until after Trump wins in November. While union leadership (minus the Teamsters), favors democrats, their membership does not wholeheartedly support.

Jim Warner
Jim Warner
20 days ago

I find it strange that the offer includes $3B for upgrades. In the world of finance three Billionaires could loan that amount without even noticing it. Bezos could loan that out with a guaranteed return that all US auto makers would buy from them. That would insure that survival of an American company and the related jobs.

Bruce
Bruce
20 days ago

What about the “Cleveland Cliffs” bid? Nothing else was said about that. Is that competitive? Or are there more politics here than mentioned?

Pat R
Pat R
20 days ago

Perhaps Leonard Leo (the Republicans George Soros) can get the deal/offer postponed until after January when Trump hopefully takes office. Trump would likely approve the sale of US Steel to Japan, but perhaps with even better terms for US workers.

Rick M.
Rick M.
20 days ago

All one has to realize is who made the decision. ‘Nuff said…

Annoyingfact
Annoyingfact
18 days ago

There can be no doubt in any one with a functioning brain they intend to destroy the steel industry along with the Auto industry! The sad part is the union members jobs will be lost to the cheaper work force replacement population anyone cares about to wager on this? History repeats on a dumbed down population!

NeilRK
NeilRK
18 days ago

What is Cleveland Cliffs offer? Did not the government save GM 2009?

Robert Zuccaro
Robert Zuccaro
20 days ago

If it saves jobs and it saves the company, I say why not? Nobody minds eating food products grown by American companies owned by the Chinese… let alone drive EVs with lithium mined from Thacker Nevada owned by a Chinese mining firm!

jack smith and his memo ; trump
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