Yeah, I am generally not a fan of Biden’s protectionism - especially so in this case because Japan is an ally.
Also, (maybe this is just my impression as I do not have a source at the moment) Nippon Steel makes higher quality steel than US Steel.
Furthermore, my understanding was that the production capacity in the US was going to remain unchanged by this deal.
In the end, I think this would have been a good thing for US steel production because Nippon likely would have made it more efficient and better than it is currently.
Sadly though, it looks like protectionism is winning the day here.
The costs of blocking the steel deal are stiff. Curbing the free flow of capital means less efficient steel production and ultimately higher prices for consumers. Moreover, Nippon has promised not to cut jobs and plans to increase investment. If so, concerns about the local economy are misplaced. The deal could even end up making us Steel stronger.
Worse, the way in which Mr Biden reached his decision was arbitrary. He had promised to guard a “small yard” with a “high fence”, with clear rules to let foreign investors know what sorts of assets are off-limits for reasons of national security, while allowing free markets to operate everywhere else. Yet he commented on the steel deal even as the Committee on Foreign Investment in the United States (cfius) was still mulling whether it posed a security risk. By doing so, he signalled that the rules are there to be broken. Foreign investors will fear that there is little to stop that small yard getting bigger. Many more American firms will demand protection.
Far from bolstering national security, Mr Biden has undermined it. Only days before the deal was announced, lawmakers were proposing to add Japan to a whitelist that bypasses the most stringent cfius rules. Now America looks high-handed and fickle. us Steel is nothing like TikTok, which the House of Representatives voted last week to ban in America unless its Chinese owner sells up. One is a media giant open to influence from a hostile power. The other is a medium-sized manufacturer that is being bought by one of America’s closest allies.
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