On January 3, U.S. President Joe Biden blocked Japan’s Nippon Steel from acquiring U.S. Steel in a $14.3 billion deal, citing national security concerns—a sentiment echoed by President-elect Donald Trump.
In a global landscape where Japan is considered a close U.S. ally, cooperating to “counter China” through alliances like the Quad and promoting “friend-shoring” of industries, the move to block Nippon Steel’s acquisition signals a cautious U.S. approach to safeguarding strategic industries, even with trusted partners.
The bipartisan call to protect U.S. Steel claims to safeguard 14,000 American jobs, appealing to both sides of the political spectrum: satisfying the left by promising job security and appeasing the right by ensuring key industries remain under U.S. control.
However, U.S. Steel, under the ownership of American capital, has expressed a desire for a significant payout and has warned that blocking the deal could lead to plant closures and job losses. The company’s capacities lag behind global standards, causing inefficiencies that Nippon’s investment aimed to address.
Considering Biden’s “open borders” stance, socialism for U.S. workers has not been his priority. Meanwhile, billionaire capitalist Trump, with his “Make America Great Again” feud over H-1B visas, also stands fundamentally opposed to workers’ interests.
Thus, any talk about workers’ rights may serve to co-opt them into the class hegemony of both Biden’s transnational capital and Trump’s national capital interests. This division within Western capital becomes increasingly blurred, as evidenced by the blocking of Nippon’s acquisition.
Notably, when it comes to defense, the U.S. Department of Defense requires only 3 percent of domestically manufactured steel, none of which comes from U.S. Steel. The DoD instead sources higher-grade steel from abroad due to the industry’s subpar capabilities—gaps that Nippon’s investment aimed to address by bringing technological upgrades to U.S. Steel.
Nippon’s offer to acquire U.S. Steel is steep, especially considering the company is hardly at the forefront of innovation. However, this is the price Nippon is willing to pay to gain access to the protectionist U.S. market. It has marketed the deal to U.S. workers by promising to maintain operations in Pennsylvania, U.S. Steel’s home state.
Ideologically, Nippon is positioning the acquisition as a way to strengthen the “free world’s” steel-making capacity, thereby supporting U.S. defense, with the added benefit of supporting military production.
The blocking of Nippon Steel’s acquisition raises questions about the nature of the U.S.-Japan alliance. Is Japan a friend or foe when it comes to strategic industries? The move highlights the complexities of global alliances and the intricacies of national interests, even among close partners.
Reference(s):
cgtn.com
