U.S. Steel Merger More Important after ‘Liberation Day’

Both companies remain committed to pursuing the deal because it makes strategic and economic sense.

SEATTLE (Scrap Monster): Shortly after President Donald Trump launched his “Liberation Day” tariffs, White House officials were out in force hitting all the Sunday morning talk shows, assuring viewers that critics like Wall Street analysts, economists, and politicos were being “yippee,” and they were on the right track.

At its core, “Liberation Day” is an effort to protect American industries, ranging from microchips to auto makers to steel and aluminum production, by placing tariffs on the import of foreign-made products. While tariffs are one way to protect these industries, I submit that there is another way.

Consider the proposed acquisition of U.S. Steel by Japan’s Nippon Steel, which was previously blocked by the Biden administration. In one of his final acts in office, President Biden killed the deal, likely seeking to bolster support among steelworker unions and voters in Pennsylvania, a pivotal battleground state.

The deal has taken on new life with President Trump ordering the Committee on Foreign Investment in the United States (CFIUS) to reopen its investigation into the deal to determine if “further action” is necessary. A welcomed development, given the rollout of the recent tariff policy aimed at pressuring American companies to reshore manufacturing jobs back to the United States.

When the sale was initially announced in 2023, Nippon Steel said the purchase “builds on our presence in the United States, and we are committed to honoring all of U.S. Steel’s existing union contracts.” U.S. Steel President and CEO David B. Burritt said the sale “benefits the United States – ensuring a competitive, domestic steel industry while strengthening our presence globally.”

I’ll admit that upon hearing the news, it struck me as unfortunate that a U.S. company with such a storied past was being sold. But then I looked into it further and concluded it was likely the best way to save U.S. Steel and shore up the vital national security resource – steel production. Victimized by decades of steel dumping by China, it slipped from once among the world’s biggest steel producers to a current ranking in the mid-20s. And here was a much bigger company from an allied country offering a generous lifeline to rescue a struggling American icon.

Nippon Steel has agreed that U.S. Steel will retain its name, brand, and Pittsburgh-based headquarters. In fact, the company stated it would relocate its existing U.S. offices from Houston to Pittsburgh.

Both companies remain committed to pursuing the deal because it makes strategic and economic sense. Nippon’s proposed investments in U.S. Steel would strengthen both companies, making them more competitive in the global steel industry.

Although President Trump initially supported blocking the deal during the 2024 election season, he now appears to have reconsidered, signaling a shift to give the government more time to conclude discussions with the companies involved.

In a recent filing, the Department of Justice stated, “The requested extension will allow the government to complete its ongoing discussions with the parties regarding the U.S. Steel and Nippon Steel transaction with the goal of eliminating the need for this Court’s resolution of the litigation on the merits.”

Of course, we all wish we could peer into a crystal ball and know which decisions today will bring about the best outcomes tomorrow. But given the Trump administration’s clear intent to promote domestic manufacturing and allied cooperation, a deal that brings significant investment and jobs back to the U.S. is more crucial than ever.

In fact, it could represent the first clear-cut victory for the current administration’s trade policy. At the end of the day, a revitalized U.S. Steel—more modern, more competitive, and with access to new markets and customers—serves the national interest.

Moreover, deeper U.S.-Japan industrial cooperation is essential in the face of a rising China, which is determined to dominate many regions of the globe. China has changed dramatically since my days in the Air Force stationed in Okinawa.

Back then, China’s military was sizable but clearly no match for American forces in the air and at sea—where any future conflict would likely play out. That’s no longer the case. Closer American-Japanese collaboration in strategic sectors isn’t just smart—it’s vital for the national security of both nations.

 Courtesy: www.intpolicydigest.org

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