Biden blocked the Nippon purchase of U.S. Steel. Trump would have too. It’s union pandering that makes the US less secure.
Biden’s National-Security Aides Wanted to Keep Steel Deal Alive
The Wall Street Journal reports Biden’s National-Security Aides Wanted to Keep Steel Deal Alive
Top officials like Secretary of State Antony Blinken didn’t want to damage the relationship with Japan. Biden sided with his domestic advisers.
President Biden went against top national-security aides when deciding to tank a Japanese takeover of U.S. Steel X -6.53%decrease; red down pointing triangle and instead align with his domestic advisers to bolster his pro-union legacy.
Staff presented Biden two broad options in recent days, administration officials said: block the $14.1 billion deal entirely, or delay an approval until Nippon Steel 5401 1.18%increase; green up pointing triangle could allay concerns that its ownership would harm the American manufacturing supply chain.
During closed-door discussions, national security adviser Jake Sullivan and Secretary of State Antony Blinken were among the foreign policy-minded aides pushing for options that could keep the deal alive, not wanting to damage a crucial relationship with an East Asia ally, according to the officials. Steve Ricchetti, counselor to the president, and other domestically focused staff said it was best to side with leaders of the United Steelworkers’ union, who had been vocal opponents of the deal since it was announced in December 2023, the officials said. Biden has called himself the most pro-union president in American history.
By stopping Japan, a country that has been close to the U.S. since World War II, from acquiring an American firm, Biden undercut his own strategy of making the U.S. an unshakable ally that always stands with its partners.
Biden cited this concern in his statement killing the move: “This acquisition would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains.”
President-elect Donald Trump on the campaign trail repeatedly vowed to block the deal, a rare point of agreement between Biden and him. With just weeks to go before Trump becomes president, officials said time had effectively run out for the Japanese company to convince the administration it could protect U.S. supply chains.
Four Accurate Comments on Biden’s Decision
- @scottlincicome : We claim that Japan is one of our closest allies. We demand that they sacrifice economic growth by refraining from the export of high tech products to China. They accommodate our wishes. And then when a few union jobs are threatened, we turn around and treat them like an enemy nation.
- @pat_hedger : Japan, the national security threat so severe that they can’t invest in some steel plants in Pennsylvania… but can sail their largest warship to California to pick up some of the super advanced stealth fighters we sold them. Got it.
- @ModeledBehavior : Blocking the purchase of U.S. Steel was not prioritizing national security over efficiency and growth. It was prioritizing pro union politics over all three.
- @RichardHaass : The @potus decision to block Nippon Steel’s buy of US steel is bad economics and foreign policy both. It threatens jobs here, encourages protectionism elsewhere, & undermines what has been a defining alliance-first approach to the world.
No National Security Risk
The Pentagon, US Treasury and state department have all concluded that Nippon Steel’s $15bn acquisition of US Steel poses no national security risks, even though President Joe Biden is expected to block the deal. The conclusions come despite Biden’s insistence that the purchase of the Pittsburgh-based steelmaker poses economic and national security risks.
Several senior officials have told the Financial Times that the deal presents no national security risks and that Biden’s opposition was political. “There is no credible analysis in the inter-agency that supports Biden,” said one former US official familiar with the internal debate.
The above from the Financial Times.
U.S. Steel Workers Rally for Nippon Steel
The Pittsburg Post-Gazette reports U.S. Steel Workers Rally for Nippon Steel
Hundreds of steelworkers braved freezing temperatures to rally Thursday afternoon for the imperiled $15 billion takeover of U.S. Steel by Nippon Steel as President Joe Biden and President-elect Donald Trump continue to oppose the sale.
Speakers described the Japanese investment as crucial to the future of Mon Valley Works facilities and urged federal officials and United Steelworkers President David McCall to visit the plants and speak with impacted workers.
“Without this deal with Nippon Steel, we will be the last generation to work here at this historic steel plant,” said Brian Pavlack, a third-generation steelworker and member of the USW local in Clairton.
“I also want to call out Senator [John] Fetterman for not backing the sale. You go on national television and you say you’re with the steelworkers and live across the street from the [Edgar Thomson] plant. I’m telling you now, Mr. Fetterman, 90% or more of the steelworkers are for the sale.”
Nippon Steel Bid Agreement
- Nippon would invest $2.7 billion in union-represented local steel facilities. This would allow the US to better compete against China.
- The merger would give American manufacturers access to high-quality, domestically produced steel.
- The merger would strengthen ties with key allies
- The merger would increase US competition within the US, while keeping production here.
- As a result of the above, the merger would produce stronger, cleaner, more advanced steel here at home for the benefit of American consumers and at a cheaper price due to investments.
On December 14, I commented Biden and Trump are Both Wrong on US Steel Nippon Merger
President Biden will block the merger of US Steel and Nippon based on alleged national security risks. It’s really the opposite.
Last year, steelmaker Cleveland Cliffs offered $8.3 billion for USS. The union supported that bid, but the company rejected it. Automakers wrote to Congress, complaining that the combined company would control 65-90% of automotive steel. This is not the case with the Nippon bid.
Read that last paragraph again. US automaker unions want the Nippon deal because the Cleveland Cliffs counter offer would create a steel monopoly.
It’s that steel monopoly that is the national security risk, not the Nippon merger.
Merger Would Lower National Security Risks
Cleveland Cliffs merger would have control 100% of blast furnace production in the U.S. and 65% to 90% of domestic steel used in vehicles.
That’s the real security threat.
U.S. Steel workers support the Nippon merger, so does Gary Indiana, and so does anyone with an ounce of common sense including UAW workers who fear higher prices for cars.
The investment by Nippon into more advanced processes would lower prices and increase competition.
My December 14 Comment
What to Expect
Currently, Trump and Biden both say they are against the deal despite the wishes of U.S. steel workers, the UAW, and common sense.
It’s a case of politics over genuine US interests.
The US already has the among the highest prices for steel in the world. The last thing the US needs is higher prices for cars that are already hugely unaffordable.
Even the autoworkers’ unions see that.
Politics and political union pandering triumph over common sense. On union pandering, Trump is as bad a Biden. And the US will be less secure as a result.
So US Steel will become a ward of the American tax payer.
It’s not politics. It’s about symbols.
Well, let’s sell it to them, if they let us buy Sony and Toyota. 🙂
“It’s a case of politics over genuine US interests.”
Why though would politics supersede a national security threat? “National security threat” has become a narrative, just as “threat to our democracy” has. Blocking the Nippon deal seems more a matter of American pride of ownership, as opposed to a security threat.
15 futurists, foreign policy analysts and other prognosticators provide some explosive potential scenarios for the new year.https://www.politico.com/news/magazine/2025/01/03/15-unpredictable-scenarios-for-2025-00196309
The new China virus is already here: hMPV
https://www.reddit.com/r/PrepperIntel/comments/1ht5fmy/chinese_woman_discussing_hmpv_translation_added/
This is exactly how COVID started then it blew up. Glad I’m still holding PUTS on SPY.
Blocking the acquisition is American hypocrisy at its best. The only significant risk (to labor unions) here was that US Steel would have been subjected to competent corporate management. Where are Musk and Ramaswamy when we need to be told (again) that we are a nation of inbred morons?
This is another example of central planning that will eventually fail too.
Question: Are you getting your money’s worth?
According to ukraineoversite.gov. as of September 30, 2024, US aid to Ukraine totals nearly $183 billion, with $130.1 billion obligated and $86.7 billion disbursed.
Former German Finance Minister Admits Corruption In Ukraine Is “Rampant”, And Large Majority Of Ukrainians Agree:
“Ukraine is now ruled by an oligarch who increasingly relies on foreign aid. A state where corruption is rampant and there are no real democratic structures,” former German Finance Minister Oskar Lafontaine told the Frankfurter Allgemeine Zeitung, cited by news agency V4NA.
According to 87.9 percent of the population and 81.3 percent of businesses, the level of embezzlement in the country has increased compared to 2022. Many hold Zelensky responsible, with 47.5 percent of citizens and 48.3 percent of company representatives stating that combating corruption is the responsibility of the president and his office.
https://rmx.news/ukraine/former-german-finance-minister-says-corruption-in-ukraine-is-rampant-and-large-majority-of-ukrainians-agree/
FYI. Here is my forecast for 2025.
Well since the US government under Biden has released nothing but lies as far as economic stats are concerned, it seems improbable that the economy would take so long to fall as projected by your post.
But then again…what does one expect from someone with TDS.
The dollar will only tumble if Congress and the Fed start debasing it again with QE. Right now they’re doing the opposite, draining at least some of the bad money printing they did. If stocks take a big fall and long rates continue higher, the dollar will become more valuable, as it could be used to buy stocks on sale or bonds with good yields.
Criminal to the end
https://freebeacon.com/biden-harris-administration/biden-bans-scores-of-natural-gas-water-heaters-driving-up-prices-with-lame-duck-regulations/
One of those almost killed me. I hate them.
Sorry to hear that. I’ve had a good experience with mine.
There’s a lot of back-door shenanigans too:
ArcelorMittal is looking into the idea with its investment bankers.
This move could spark a bidding war, as Esmark offered $35 per share for US Steel earlier this week. And before that, US Steel rejected an unsolicited cash and stock proposal from Cleveland-Cliffs (NYSE:CLF), which offered $17.50 in cash along with 1.023 of its own shares for each share of US Steel. US Steel called the offer “unreasonable.”
Nippon then offered some $55 per share
I need to find the report, but this started by these guys that kicked the buyout price above Cleveland Cliffs (they actually sold prior operations to CC) that then Nippon jumped in on once CC said no.
All about the buy-out, and execs/investors getting theirs above the political/union concerns. Nippon isn’t known for standing up with their “commitments” on new acquisitions, BTW.
I wouldn’t be surprised if Cleveland Cliffs pushed Biden and the DOJ to reject Nippon’s offer just to knock a bunch of zeroes off the purchase price for them later – or watch their only US competitor close down.
Have a friend who was laid off from US steel a year ago October. Writing seemed on the wall
very true
Although, interesting that USS said they can continue, but only if they fire the union workers in Pittsburgh and move productions to TN (iirc).
…but Nippon can operate at a profit with the union, in Pitt, AND invest $3 billion in upgrades, AND give the payday to the execs and investors at 3x what the nearest buyer would offer?
Something’s fishy…
My friend was not in a union. Not all their employees are.
Agreed. At least the Nippon deal would keep the corporate functions in Pitt, whereas Cleveland Cliffs would have shut all corp functions down and incorporate them into CC in Cleveland leaving just the union and the plant running (at least for a little bit).
Globalism is the new communism. It has made inroads into the USA more than any other time in US history. But in November it was dealt a near fatal blow. Let’s finish it off before it regains its foothold.
Have to say, the commonality between the move right in politics in Western countries is watching the rejection of 10 years of Reagan Neoliberalism, Chinese communism (globalism) and progressive cultural warfare.
Hope you’re right
“The US already has the among the highest prices for steel in the world”.
If you studied how Rockefeller build Standard Oil you would understand how the high price came about.
Bernie Bernie
“We are losing the struggle for economic justice. While 60% of Americans live paycheck to paycheck, the gap between the 1% and everyone else is growing wider.”
As it should be. Thanks for the votes!
Nothing untrue here.
President Biden bestowed the Presidential Medal of Freedom on 19 new recipients Saturday, including George Soros and Hillary Clinton — sparking outrage from top lawmakers and law enforcement professionals.
“Hillary Clinton abandoned our Navy SEALs in Libya and George Soros spent millions electing soft-on-crime politicians that let criminals wreak havoc in our major cities,” said Montana’s new Senator, Tim Sheehy.
“Joe Biden’s decision to give Hillary Clinton and George Soros the Presidential Medal of Freedom is a national disgrace.”
How did Soros PROFIT from his meddling in our Politics? There has to be a money connection, right?
Agreed, he and his family already have enough money.
They are simply after unified global power at this point.
Power that I bought for a song.
Soros got his money for nothing more than a bet on shorting the British currency earning a cool billion dollars – in ’92.
He’s WAY more ahead in power then trust fund baby Musk/Trump, and more dangerous with his politics.
Ugh, the ass-kissing of labor is unhealthy. Nippon would have been a blessing for the industry here. Grandad worked a lifetime in the Clairton Coke Plant, back when the pollution was so bad it would peel the paint off your car. (not to mention your lungs) U.S. Steel has been bleeding for what, 40+ years?
This is the wrong decision. It’s also Bidens to make.
Just from yesterday here:
https://triblive.com/local/regional/devastation-relief-on-spectrum-of-emotions-for-stakeholders-in-u-s-steel-sale-after-bidens-block/
and you want me to believe Biden has capability to do this? seriously? whos making this decision going against Advisors?
“Trump is as bad a Biden.”
Typo due to TDS
Are you trying to get banned?
OK I changed the sentence to “On union pandering, Trump is as bad a Biden. And the US will be less secure as a result.”
If you disagree, you have TDS
Of course not. Your hatred of Trump colors all of your posts. It calls into question your assumptions. Pointing that out is fair. You voted for yourself. So I assume you think only you would be an acceptable President.
Thanks for speaking up for my wrinkly pet orangutan. You are a true loyalist.
Noting the weakness in some of Trump’s decision making is not hatred of Trump. I want him to do well but also see nonsense with some of what he proposes.
It’s your blog, Mish, so you’re going to do whatever you want.
But personally I applaud you for calling out and threatening a ban of Midnight. Even in this make-up a**-kissing rebuttal, he’s still calling you out falsely. He didn’t question your assumptions initially; he just yelled TDS at you. And if “you think you only you would be an acceptable President” as Midnight claims, then why would you have only TDS and not BDS as well?
What does Midnight actually add to these posts/discussions? He posts a lot, but it’s all simplistic “criminal”, “living hell for 4 years”, etc. In between calling you out without giving actual rationales for differences of opinion.
Cheers
Lol. Of course you would prefer not hearing from those who disagree with you…hubris, you are literally the meme. You did it. Congrats
“Why do people on the left find it impossible to be congenial toward those they disagree with?” Maher responded, saying, “It’s in their psychological profile, they just have this need for virtue signaling, and to have their friends—and I guess everybody on social media—think of them as the good people. ‘We’re the good people. We know who’s good. And it’s us.’”
Same ole, same ole. Another red herring argument from you that I don’t want to hear disagreements.
I could care less what you write from your BarcaLounger; I could easily hide your comments: I’m here to read what Mish writes and what thoughtful commenters contribute. And I disagree with Mish on a regular basis, but I don’t resort to ad hominem attacks to do so like yourself.
But I feel bad for Mish. He researches material and writes blogposts for our benefit. And you contribute little beside trite comments (oftentimes completely off topic to put forth more political POV crap) with little rationale and almost no actual citation that other commenters can read or link to (like here).
So I don’t have to defend Mish; he’s been doing this a long time. But posters like you are a primary reason why his blog will have limited reach and impact. If he’s OK with that, why do i care?
Cheers
Possibly on union pandering. Trying to say Trump could ever be as bad after living through the last 4 years is kind of impossible don’t you think?
Mish, your own community rules:
Moderators will remove offending content. Repeat offenders will be banned. Moderators may remove any content, at their discretion, not necessarily limited to the above rules. Examples include excess bickering, inaccurate quoting of Mish or others, and persistent rudeness.
I think Midnight definitely falls into that bolded category.
Reddit is down the hall and to the left.