what’s at stake
The US and Japan have a close alliance, one that grew even stronger in recent years — except for one wrinkle: then-President Joe Biden’s decision to block Japan-based Nippon Steel’s bid to takeover US Steel. The move delighted the United Steelworkers union but divided his administration, triggering a heated debate about US investment policy, national security, and friendshoring.
The issue reemerged in recent days, as President Donald Trump hosted Japanese Prime Minister Shigeru Ishiba and opened the door to a different deal that would see Nippon invest — but not purchase — the company, after indicating he would oppose the proposed takeover. Meanwhile, Nippon and US Steel are challenging Biden’s veto in court.
who’s making the case
Todd Tucker, director of the industrial policy and trade program at the Roosevelt Institute, argues that the proposed acquisition risks US national security and that Biden was right to block it:
“Yes, [the deal is a national security risk] when one considers how Congress ordered presidents to consider ‘security risks’ under the Defense Production Act — which is less about imminent military threats, and more about the long-term maintenance of domestic capacities in strategic industries like steel. When the US is down to just a handful of steel blast furnaces left, it is legitimate to try to seek greater assurances for continuity of operations than if there were dozens or hundreds. In this case, the steelworkers union has long seemed more serious about continuing to invest in primary steel production than the selling or would-be acquiring companies.”
Charlie Dent, former Republican congressman from Pennsylvania, argues that a takeover presents no national security risk and that the US steel industry will suffer without it:
“There are no real national security concerns in the Nippon-US Steel deal. Everyone knows Japan is a close ally and blocking the deal, I think, would be utterly shameful. The day before the Biden administration blocked the Nippon-US Steel, that same administration allowed an air-to-air missile defense system to be sold to Japan. They agreed to a foreign military sale, and for good reason, because Japan is a close national security partner and ally. It’s absurd to suggest that Japan is a national security threat.
Trump should reverse this decision. I think Donald Trump has an opportunity to save steelmaking jobs in Pennsylvania, because without this deal, I expect those plants — those big integrated plants in western Pennsylvania — to close at some point. And so I think Donald Trump could actually save the day if he permitted this agreement to go through because it would provide for a massive investment of fresh capital and state-of-the-art technology. We would be making steel better in Pennsylvania.”