Japanic! at the Steelco

U.S. Steel's Mon Valley Works Clairton Plant and Clairton Coke Works facility in Clairton, Pennsylvania, on Monday, September 11, 2023. (Photo by Thomas O'Neill/NurPhoto/Getty Images)

Happy New Year. While most of us were holiday hibernating, venerable steelmaker and longstanding champion of American economic nationalism U.S. Steel gleefully agreed to be acquired by its onetime nemesis, Japanese multinational Nippon Steel. Since U.S. Steel had been on the auction block since the summer (when Ohio-based Cleveland Cliffs, backed by the United Steelworkers union, initiated an unsolicited buyout that U.S. Steel quickly rejected), the only surprising thing about the sale announcement was the name of the acquirer: Nippon Steel had never been mentioned as a possible suitor. Beyond that, the announcement gave us little to get worked up about. U.S. Steel would keep its name; Nippon Steel would honor existing USW and other contracts; and the merged company was eyeing domestic expansion (to meet an expected increase in steel demand), not painful contraction.

Within hours of the announcement, however, people did get worked up. In particular, the USW and a bipartisan cadre of protectionist politicians, wonks, and pundits denounced the deal as undermining national security and the U.S. industrial base, threatening American workers, and revealing fundamental flaws in corporate governance and U.S. regulation, which (supposedly) prioritizes shareholders and managers over the former priorities. A trio of Pennsylvania Democrats (Sens. Bob Casey and John Fetterman, along with Rep. Chris Deluzio) and a trio of “national conservative” Republicans (Sens. J.D. Vance, Marco Rubio, and Josh Hawley) each wrote to Treasury Secretary Janet Yellen, chairwoman of the Committee on Foreign Investment in the United States (CFIUS), to block the transaction because of its “dire” implications for the U.S. industrial base and national security. The pols and pundits were followed by President Biden himself, who—via economic adviser Lael Brainard—didn’t go so far as to oppose the deal but instead pulled the classic Washington move of calling for an “investigation” by CFIUS … while explicitly praising the USW (whose support they think they need in 2024). The union, the Financial Times reported, “welcomed Brainard’s intervention.”

(Of course it did.)

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