Outgoing United States president Joe Biden has blocked Japan’s Nippon Steel — the world’s fourth-largest steelmaker — from acquiring US Steel, ranked 24th globally and the third largest in the US, citing national security concerns.
Most financial observers thought the sale would be a good deal for the industry, given the company’s financial troubles.
Japan is a major US ally, supporting US military threats against China, US support for Israel’s genocidal war in Gaza and US sanctions and threats against Russia. Japan is also the largest foreign holder of US debt.
US Steel and Nippon Steel filed a lawsuit to support their deal, which dates back to 2023. The suit says that the government’s decision to block the sale is driven by domestic politics, not national security concerns.
Biden killed the deal, saying that US Steel should be owned by Americans as a national asset and that it is necessary for the country’s infrastructure and war machine.
Officials from the United Steelworkers of America (USW) praised Biden’s decision to block the acquisition, even though it could lead to more job losses.
It is strange that a company belonging to a strategic ally could be deemed to be a national security threat. Japanese and European companies already invest in many basic industries in the US.
Japanese Prime Minister Shigeru Ishiba asked Biden to allay concerns in the Japanese and US business communities over his decision.
Biden has always been a Cold War warrior and promoter of “America First” policies. As a senator, he supported President George W Bush’s invasion of Afghanistan and Iraq and the War on Terror.
Incoming President Donald Trump has similar views, summed up in his “Make America Great Again” slogan.
The US ruling class and its two parties — Democrats and Republicans — agree on expanding US imperialist domination. The rhetoric and tactics may vary.
Biden’s decision to stop the sale is consistent with his own tariffs and sanctions against “enemies” like China and Russia.
Who wins? The political elites, who oppose globalisation and any economic bilateralism that doesn’t give a superior position to the US. It’s why Trump is promoting across-the-board tariffs against allies such as Canada and Mexico.
Who suffers? The working class. There is a continuity between Biden and Trump.
So, what explains the USW’s support of Biden’s anti-Nippon Steel decision? The officials know US Steel is in financial trouble and decline, with jobs and benefits at stake.
USW International President David McCall said the union “welcomes” the decision and has “no doubt that it is the right move for our members and our national security”.
McCall said that over the past year, as the proposed acquisition was under review, “our union’s first and only concern has been the long-term viability of our facilities as we look to ensure a strong domestic steel industry well into the future”.
Many workers don’t see it that way. Since US Steel owners have downsized, jobs have been lost, and more will be lost without the deal.
Under US labour law, change of ownership does not abrogate existing contracts. Nippon would have had to recognise the union.
Biden and Trump want more manufacturing inside the US. Keeping out foreign capital and raising tariffs on countries causes more inflation and hardships. But it can force allies and others to bend to Washington’s policies.
This is why Nippon Steel’s proposal was denied. It had nothing to do with “national security”, it was a power play.
The union officials see themselves as “America First”, not trade unionists first, even if it hurts their own members and the working class.
Rank and file steelworks at US Steel and other basic industries know making “America great” does not necessarily give them more job security with better wages and benefits.
If there is a need to safeguard basic resources such as steel and oil, the government could simply nationalise these companies and make them public property. This would protect resources, jobs and unions.