In a more sane country, President Joe Biden wouldn't have to weigh in on the potential sale of U.S. Steel to Japan-based Nippon Steel, and even if he did, it would be a problem. isn't it.
Unfortunately, that is not the reality we currently live in.
“It's important to keep American steel companies strong, backed by American steelworkers. I told steelworkers we had their back, and I meant it,” Biden said in a statement Thursday. said. “U.S. Steel has been an iconic American steel company for more than a century, and it is critical that we remain a domestically owned and operated American steel company.”
It remains unclear exactly what steps the White House intends to take to prevent Nippon, a publicly traded international company that already operates steel mills in the United States, from acquiring U.S. Steel. But Biden's announcement is already hurting the very companies he claims to be helping. U.S. Steel's stock price fell sharply on Thursday and fell again on Friday morning.
Then you will know who is the winner and who is the loser in this situation. The agreement with Japan is not a foreign invasion. This is a mutually beneficial transaction concluded with the consent of U.S. Steel leadership. Why do I need permission from the president to open a business?
In fact, a Japanese acquisition could benefit everyone involved, from U.S. Steel's shareholders and executives to the plant's workers. Nippon Steel announced plans to invest $1.4 billion in the revitalization of U.S. Steel. This could do what neither former President Donald Trump's tariffs nor Biden's blue-collar policies were able to accomplish.
“In many ways, this deal is a victory for Biden in his attempt to revive American manufacturing.” wall street journal. “US Steel will receive an infusion of capital and technology. The United States and Japan will work together to counter China's dominance in the global steel market.”
Mr. Biden's opposition to the deal is partly about performative politics, an attempt to gain a slight advantage in the power struggle of November's election by targeting these companies, their employees, shareholders, employees and customers. It is about using as a pawn. That's embarrassing.
This is probably a decision influenced by nepotism.as journal Ohio-based Cleveland-Cliffs made a failed bid to buy U.S. Steel last year, and the company is trying to get another takeover by asking federal regulators to negotiate a deal with U.S. Steel and the Japanese-made deal, according to the Times. They are lobbying hard to stop it. That's terrible.
“President Biden's decision to oppose the deal is clearly political,” said Nancy McClarnon, president and CEO of the Global Business Alliance, which advocates for the interests of foreign companies doing business in the United States. It is clear that it is.” statement. “This announcement shows contempt for one of the United States’ closest allies. Japan is the largest foreign investor in the United States, a major contributor to the U.S. economy, and brings nearly 1 million jobs to the United States. Blocking this deal not only contradicts the Biden-Harris administration's open investment policies but also risks alienating key economic and security partners. ”
Some facts worth remembering: Despite its name, U.S. Steel is not an extension of the federal government. Even if McDonald's rebrands himself as US Burgers and Fries, the company is still a private company and not part of the government subject to the president's whims.
Another point is: Although both companies are frequently described, US Steel is not actually an American company, and Nipo is not actually a Japanese company. Both are publicly traded and owned by shareholders who may be located anywhere in the world. Nippon is no different from Toyota or Nintendo, both publicly traded Japanese companies that employ Americans and have many American customers. To suggest otherwise is nothing short of politically expedient xenophobia.
In other words, if Nintendo wanted to sign a promotional deal with McDonald's and the president announced his intention to block it, that would be clear government overreach, and it would also be pretty weird. It doesn't matter to him. This is the same.
It would be nice to explain this as a special situation caused by a combination of U.S. Steel's iconic (and confusing) brand and Biden's desire to curry favor with blue-collar voters before the election.
Unfortunately, this appears to be part of a disturbing bipartisan trend. The Federal Trade Commission (FTC), under the leadership of Biden appointee Lina Khan, is seeking to restructure and expand its role in regulating these transactions and is attempting to block some proposed mergers. The Biden administration's Justice Department played a major role in blocking a potential airline merger earlier this year.
Meanwhile, prominent Republicans such as Sen. J.D. Vance (R-Ohio) have signaled support for Biden's intervention in the U.S. Steel-Nippon Steel deal and said the FTC's activities during Khan's tenure have increased. He praises his role. Vance is reportedly the front-runner to be Donald Trump's running mate, potentially giving him an even stronger platform to demand government control over private company decisions. be. (It's also worth noting that Mr. Vance is the representative for the state where Cleveland-Cliffs is headquartered. Perhaps that's why he believes foreign investment in U.S. industry can be a boon for U.S. workers.) For reasons conveniently forgotten, he writes: hillbilly elegy. )
Recent bipartisan attempts to ban TikTok, or perhaps even an attempt to force former Treasury Secretary Steve Mnuchin to sell it, are similar to the government overreach and blatant cronyism evident in the U.S. Steel situation. sharing elements.
This is all madness. Private companies shouldn't have to hire armies of lobbyists to get approval from the president or Congress before committing to a business deal. While there may be a narrow role for government to play in preventing consolidation that creates monopolies, it's clear that's not a factor in the US Steel deal (nor is the TikTok situation), and let's pretend Biden is too. I haven't even said that. He's only intervening because he doesn't like the idea of a nominally American steel company being acquired by a nominally Japanese steel company. That's totally inappropriate.
Of course, Mr. Biden and Mr. Vance are allowed to voice their opinions on the U.S. Steel-Nippon Steel deal, but no one should be forced to heckle their ideas.
