Time to Stop Playing Politics with Nippion/U.S. Steel Deal
On September 21st then Japanese Prime Minister Fumio Kishida stopped by President Joe Biden’s home in Delaware. Official reports indicate the two leaders warmly greeted each other. President Biden lauded the “special friendship” he has with the Prime Minister. The conference concluded with a joint statement indicating: “Japan and the U.S. continue to be global partners at the core of a free and open international order.”
Given the challenge both nations face from Chinese economic and military aggression a strong U.S.-Japanese alliance is indeed at the core of efforts to maintain stability in the region. The official communiqué concluded that the alliance was necessary to “oppose and resolutely respond to any unilateral attempts by China to change the status quo by force in the East and South China seas.”
The economic ties that bind the U.S. and Japan were reinforced by the leaders. Kishida noted: “Japan has been contributing to the U.S. economy as the largest investor in the U.S. and that it will continue to further strengthen Japan-U.S. cooperation based on these foundations.”
Meanwhile, back at the White House, the Biden Administration has been attempting to block what could be the most economically beneficial U.S.-Japanese partnership: the proposed $14.9 billion acquisition of U.S. Steel by Japan’s Nippon Steel. President Biden’s “special friendship” with Japan evidently has been eclipsed by his alliance with short-sighted domestic labor union leaders.
U.S. Steel is, of course, an iconic American company and its corporate presence in Pittsburgh is baked into the city’s identity. Nippon has pledged to keep the company’s corporate headquarters in the Steel City and to invest billions to upgrade manufacturing facilities in the region.
Opposition to the Nippon acquisition has centered on national security concerns. The deal is being reviewed by a deep state agency known as the Committee on Foreign Investment in the United States (CFIUS) populated by unelected bureaucrats from various agencies who deign to supplant the free market their being possessed by superior wisdom. A decision from that agency was punted until after the election so a final determination remains pending.
Despite the fact actual union workers appear to be divided on the Nippon deal many candidates have chosen to appease union leadership. Vice President Kamala Harris, former President Donald Trump, and U.S. Senator Robert P. Casey, Jr. have all spoken out against the deal.
Other elected officials are being more realistic. Kim Ward is the President Pro Tempore of the Pennsylvania Senate and represents nearby Westmoreland County, which like Pittsburgh has a rich coal mining and steel making history. Ward’s statement on the Nippon/U.S. Steel deal succinctly puts the importance of its approval into context:
“We should be encouraged by Nippon Steel Corporation’s announcement to commit ‘no less than’ $1 billion in investments at U.S. Steel’s Mon Valley Works facility to upgrade or replace its hot strip mill. Nippon’s pledge to honor the current union contracts along with their willingness to make the necessary upgrades to the Mon Valley Works facility demonstrates a commitment to future generations of Pennsylvania laborers.
Nippon Steel’s investment in cutting-edge infrastructure at the Mon Valley Works facility will also generate critical construction jobs for the building trades which will help create certainty for all. With grace and grit, many southwestern Pennsylvania families built this country and our state alongside U.S. Steel and we will continue to do all we can to maintain its presence where it belongs – the Steel City.”
The Wall Street Journal agreed with Ward stating: “Nippon Steel’s investment would help revitalize U.S. steel manufacturing . . . but these days America appears to be led by a confederacy of economic dunces.” The newspaper then went on to nominate opposition to the deal as the “dumbest economic policy” of the year.
Given the obvious economic benefits to the Pittsburgh region Reason magazine’s Eric Boehm summarized the opposition saying: “This is naked cronyism wrapped in nonsensical xenophobia: Japan is one of America’s closest allies.”
Boehm explains:
“The political opposition to the U.S. Steel/Nippon deal is a perfect example of why concentrating more economic power in Washington, D.C. is a terrible idea. Politicians seeking to create more opportunities for American workers should be celebrating this foreign investment in domestic manufacturing. Instead the levers of power are being manipulated by lobbyists and special interests to do the opposite – in pursuit of policies that will leave U.S. Steel and its employees worse off.”
Perhaps now that the election is history the self-serving maneuvering of out-of-touch union leaders and the desire by politicians to pander with economic populism will be set aside and the Nippon/U.S. Steel merger can proceed as it should – on its merits.
(Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly American Radio Journal and Lincoln Radio Journal. His e-mail address is [email protected].)
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